The article by Luis Castro Kerdel, published in Caracas Chronicle Feb 2026, proposes a bold restructuring of Venezuela’s oil sector aimed at preventing future nationalizations and attracting long-term private investment. Castro Kerdel argues that Venezuela’s oil history has been defined by a persistent struggle between private capital and the State over control of oil revenues since the Los Barrosos II oil blowout in 1922. Nationalizations in 1976 and 2006, he notes, created a precedent that continues to deter investors and contributed to the collapse of oil production from 3.7 million barrels per day in 1970 to less than one million barrels today.
To address the failed current state of oil production in Venezuela, Castro Kerdel proposes a “citizen ownership” model that removes the State as a direct participant in oil operations.
The author contrasts Venezuela’s experience with that of the United States, where decentralized private ownership and competitive incentives—particularly in regions such as Texas’ Permian Basin—have driven production to more than 13.6 million barrels per day. Venezuela’s fiscal regime, which historically extracted more than 80% of oil profits through royalties, income taxes (ISLR), and windfall taxes, remains uncompetitive even after reforms to the 2026 hydrocarbons law, leaving investor returns below those in jurisdictions such as Canada, Brazil, Colombia, and Guyana.
To address this, Castro Kerdel proposes a “citizen ownership” model that removes the State as a direct participant in oil operations. Instead, private companies would partner directly with Venezuelan citizens, splitting profits 50% for investors and 50% for citizens. These citizen revenues would be distributed through a sovereign trust managed by international financial institutions, providing dividends to all Venezuelans.
The proposal also includes eliminating corporate taxes at the source and replacing them with a citizen dividend system, under which the government would finance itself through standard taxes on citizens’ income and economic activity. Castro Kerdel argues that by making citizens the direct beneficiaries and “guardians” of the industry, Venezuela could align incentives, reduce political risk, and transform oil from a source of conflict into a foundation for economic recovery. 1500 words. For full story.
