The Energy Regulation and Markets Review - Stikeman Elliott

Venezuela
Oil and gas activities are regulated only by the federal government; neither the
state, nor municipal governments can regulate or tax oil and gas activities. Crude oil
and gas at the wellhead is regulated in the Organic Hydrocarbons Law and regulations
thereunder. Gaseous hydrocarbons including liquid hydrocarbons and non-hydrocarbon
components contained in gaseous hydrocarbons, as well as gas resulting from the refining
of oil are regulated in the Organic Gaseous Hydrocarbons Law (‘the Gas Law’) and
regulations thereunder. 17
i The regulators
The MEP is the entity with oversight over hydrocarbon activities (petroleum or gas). It
has broad powers and scope of authority, and handles the relationship with the operating
companies. In this regard the MEP creates and follows up on the policies, planning,
performance and oversight of hydrocarbons activities. Such powers entail supervision of
matters such as development, conservation, use and control of such resources, including
the study of markets, analysis and fixing of the prices of hydrocarbons and their products. 18
Moreover, the MEP is the entity in charge of all matters related to the administration
of hydrocarbons; therefore, it has the power to inspect all works and related oil and
gas activities, including the auditing and review of the accounting corresponding to
operations generating taxes, charges or contributions established in the law. 19
Enagas, which is a specific national gas entity, has some oversight and regulatory
powers over the gas sector, but it is mainly an advisory and technical body. Enagas is
a functionally autonomous administrative body (with no separate legal personality),
directed by a board of five members. Its most important objectives include:
a promoting and supervising the development of the transport, storage, distribution
and commercialisation of gas;
b supervision and supply of information to the MEP on the existence of
non‐competitive conducts, monopolies or discriminatory conducts;
c proposing to the MEP for its approval the establishment and modification or
limits of the regions for the distribution of gas;
d promoting the development of secondary markets;
e proposing to the MEP for its approval conditions to qualify companies that may
perform the transport, storage, distribution and commercialisation of gas;
f proposing to the MEP for its approval fair tariffs for transport and distribution;
g supervising the free access to the systems of transport, storage and distribution of
gas;
h promoting the efficient use and application of best practices in the gas industry,
and its use as a fuel or raw material;
i oversight of the rights and duties of participants in the gas industry; and
j advising the gas industry on the correct application of the basis and formulae for
the calculation of gas prices and tariffs.
17 Article 2 of the Gas Law.
18 Article 8 of the Hydrocarbon Law.
19 Article 6 of the Gas Law.
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