New Environmental Law Threatens Feasibility of Venezuelan E&P Projects
A new environmental law designed to protect Venezuela's indigenous peoples and communities from the negative impact of hydrocarbons exploration could become an obstacle for new E&P projects in the country, newspaper El Universal reported.
The law, which was passed by the national assembly on December 27, 2005, establishes a series of much stricter environmental protection measures including restrictions on the storage and disposal of toxic substances.
The law also mandates reparations and/or compensation for damages to the environment. Existing projects have two years to adapt their operations to the new requirements and indigenous peoples can request constitutional protection or even the annulment of a concession if a project is deemed unsuitable.
"The first question for an economist would be how much will it cost the [Venezuelan] state to bring its natural resources exploitation activities into line with the new law," Fernando Fernandez, a lawyer with law firm Baker & McKenzie, was quoted as saying in the article.
Fernandez was one of the lawyers who prepared an impact report on the new law, according to the article.
Geographically the law covers two-thirds of Venezuela. Indigenous peoples make up a sizable part of the population in the oil and natural gas rich states of Anzoategui, Delta Amacuro, Zulia and Monagas.
About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.