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Despite Britain currently lacking the capability to produce new main battle tanks, with only modernization of existing ones possible, the option of light tank procurement is not being considered. The country's defense ministry responded to a parliamentary inquiry about possible light tank procurement, stating there is currently no need for them. At the same time, the British Ministry of Defence monitors potential market offerings, UK Defence Journal reports. Defense Express recalls that Britain's plans currently involve keeping only 148 upgraded Challenger 3 tanks in service, manufactured from old Challenger 2 hulls. Of the 213 Challenger 2s in service, their hulls are quite worn, delaying the modernization process. The possibility of tank exports has not yet been ruled out. Britain currently lacks main battle tank hull production capability. The only factory capable of this, Vickers Tank Factory in Leeds, closed in 1999. It was demolished, with the site now being developed for residential housing. In other words, the British cannot produce new MBTs even in the medium term.

Britain can and does manufacture ASCOD chassis for the Ajax family of combat vehicles. These are ordered in six different versions, of which only two are combat vehicles, the Ajax reconnaissance vehicle itself (effectively an IFV) and the Ares APC. Though the ASCOD chassis has a stated maximum load capacity of 42 tons, quite sufficient for mounting a turret with a 105mm or even 120mm gun. An excellent example of such a vehicle is the M10 Booker, built precisely on this General Dynamics platform. At the same time, it should be noted that despite spending over $1.8 billion and 10 years on the light tank project, as well as producing 80 vehicles, the Pentagon has abandoned its M10 Booker light tank. The main concept of transporting two vehicles initially they wanted three on a C-17 could not be realized. In Britain, which has a quite powerful military transport aircraft fleet of 22 A400Ms and 8 C-17A Globemasters, the key benefit from light tanks could be ensuring 120mm caliber presence on the battlefield, or at least 105mm.

National champion BAE Systems has an updated version of the M8, which was promoted for the U.S. Army Mobile Protected Firepower light tank competition. Because the Pentagon objectively skewed requirements toward the M10 Booker project winner, development went no further. The turret could quite likely be transferred to ASCOD. At the same time, even despite debate about the tank's place on the battlefield, the British Ministry of Defence position on light tanks may be entirely driven by the fact that the Ajax program has encountered such significant difficulties that undertaking any additional developments on this chassis may simply be ill-timed.

China has rapidly expanded its nuclear-powered-submarine fleet in recent years, and has now surpassed US submarine production rate, according to a new report by a London-based think tank. The increase in Chinese submarine numbers will present a growing challenge for western countries despite the continued qualitative differences of Chinese submarines compared to US and European designs, according to the International Institute of Strategic Studies (IISS).

ah, we gotta keep up the classic "the enemy couldn't possibly have made anything of the same quality as us!" line

Writing in the IISS’s Military Balance blog, Senior Fellow for Military Capability and Data Assessment Henry Boyd and Research Fellow for Defence Procurement Tom Waldyn said that China launched 10 submarines with an estimated displacement of 79,000 tonnes between 2021 and 2025. These figures surpass the rate of submarine production in the US, which launched seven boats displacing 55,000 tonnes during the same period. “Most significantly, this includes the seventh and eighth Type 094 (Jin) nuclear-armed ballistic-missile submarines (SSBNs), which come as part of the emergence of Beijing’s nuclear triad,” according to the authors. They noted that commercially available satellite imagery taken in early 2026 showed six Type 094s in total, spread between the Bohai Shipbuilding Heavy Industry Co (BSHIC) shipyard in Huludao, the 1st Submarine Base at Jianggezhuang, the Xiaopingdao test facility and the 2nd Submarine Base at Yalong Bay on Hainan Island. “Allowing for additional boats either on deterrence patrol or under cover for refit during this period, it is almost certainly the case that China has launched a seventh and eighth Type-094 in 2024 and 2025, respectively,” the authors conclude. The increase in Chinese submarine building capacity came about because of an expansion at the BSHIC shipyard in Huludao between 2019 and 2022, which saw the construction of a second submarine manufacturing hall and other facilities. The state-owned company is responsible for the construction of China’s fleet of nuclear-powered submarines.

In addition to the Type 094s, Bohai is also producing nuclear-powered guided-missile submarines (SSGN) for the People’s Liberation Army – Navy (PLAN), with the report suggesting that nine Type 093B (Shang III) boats have been launched between 2022 and this year, based on commercial satellite imagery of the facility and US government assessments. The Type 093B is an improved variant of the earlier Type-093A (Shang II) submarine deployed by the PLAN during the 2010s, with the authors stating that the upgraded design is reportedly fitted with a vertical launch system (VLS) for guided missiles. A new class of SSGN, that is known to already known to be in development and has been reported elsewhere as having been designated the Type 09V, has also been launched this month, according to the report. The VLS for these PLAN SSGNs are likely to carry anti-ship missiles such as the hypersonic YJ-19 displayed at China’s military parade in September last year, rather than land-attack missiles typically carried by US Navy SSGNs, reflecting the PLAN’s “primary focus on peer-level naval combat in the Western Pacific, compared to the wider expeditionary power-projection mission that the US Navy has held for decades.”

However, the report authors also note that the limiting factor for PLAN submarine operations were their relative noise levels rather than total inventory, noting that both the Type-093 and Type-094 hulls were noisier and therefore easier to track when deployed. “For this reason, the Type-094 SSBNs are currently believed to only operate in the relatively protected waters of the South China Sea, where other PLA assets are able to offer them some protection,” the authors conclude. However, that assessment comes with a big caveat: the understanding of sub noise levels was based on a 2009 US Office of Naval Intelligence (ONI) report, which said Chinese subs made noise comparable to late Cold War Soviet design.

China, one of the fastest developing countries in the world? yeah we're going to just assume they're at a 80s Soviet level of tech, why not!

Last year, the U.S. government was able to reverse engineer a critical subcomponent for the 30,000-pound GBU-57/B Massive Ordnance Penetrator (MOP) bunker buster bomb. Leveraging technology from the Army Tactical Missile System (ATACMS) short-range ballistic missile saved years of work that would have otherwise been necessary to “eliminate obsolescence issues and meet operational demands.” The reverse-engineering effort also highlights the impacts of being locked into a single vendor, and underscores why the Pentagon is now pushing to make changes to, if not end this practice. Details about the reverse-engineered component and other aspects of the MOP program were contained in a recent U.S. Air Force contracting announcement regarding efforts to replenish stocks of those bombs following Operation Midnight Hammer. During that operation, B-2 Spirit stealth bombers dropped 14 GBU-57/Bs on Iranian nuclear facilities. The Air Force Life Cycle Management Center (AFLCMC) had to produce a detailed justification for awarding a sole-source contract to Boeing for the production of new MOPs and the sustainment of the existing inventory. Boeing is the bomb’s current prime contractor. A redacted copy of that document is available online. “The Government has a follow-on need for additional production of [redacted] MOP Tail Kits with projected delivery starting 10 January 2028 to replace expended units and reach the United States Air Force’s [redacted],” the so-called Justification & Approval (J&A) document explains. “The Government has a need for replenishment production of GBU-57 MOP weapon system components.”

It is unclear what the total size of the GBU-57/B inventory was before or after Operation Midnight Hammer. As of 2015, prime contractor Boeing had delivered at least 20 of the bombs, according to the Air Force. However, additional orders have been reported over the years. In 2024, a story from Bloomberg had also said that a facility in Oklahoma was being expanded to help triple or even quadruple the annual output of these bombs. The MOP’s tail kit, also designated KMU-612/B, contains the bomb’s GPS-assisted inertial navigation system (INS) guidance package and other systems. It is combined with a BLU-127/B penetrating “warhead” and other components, including advanced fuzes designed to help produce the maximum destructive effect on a target after burrowing deep down into the ground, to create a complete GBU-57/B bomb, or all-up-round (AUR). “In August of 2025, the Government successfully reverse engineered a critical subcomponent of the MOP weapon system saving 4-years of design work and enabling the utilization of existing Army ATACMS technology to eliminate obsolescence issues and meet operational demands,” according to the J&A document. “However, the time to reverse engineer all MOP components would result in unacceptable delays in meeting mission requirements.” The MOP J&A does not elaborate on the ATACMS technology in question, or what company or companies may now be in line to produce the resulting subcomponent for the bombs. Lockheed Martin is the current prime contractor for ATACMS, a family of short-range ballistic missiles that you can read more about here. It should also be noted that the U.S. military’s reverse-engineering parts of key weapon systems is not entirely uncommon, especially if the original source of the components in question has gone out of business or otherwise no longer exists.

The J&A document says it would take an estimated 60 months, or five years, to create an entirely new MOP tail kit design and then go through the required processes to certify it for operational use. It also explains why the KMU-612/B tail kit, specifically, is so central to the need to award a new sole-source contract to Boeing. “With regards to IP [intellectual property] rights, The [Redacted] Company is the Original Equipment Manufacturer (OEM) of the MOP weapon system and retains ownership of the intellectual property data associated with the munition’s tail kit,” it explains. “In particular, [redacted] owns the technical data package and manufacturing process methodologies of the tailkit unit entirely. [Redacted] has uniquely acquired expertise over a period of ~18 years of adapting this specialized weapon to meet evolving mission needs as MOP transitioned from proof-of-concept to full operational capability. This expertise pertains, but is not limited to, knowledge of the guidance algorithms, navigation systems, hardware components, specialized test equipment, and software critical to producing and sustaining the MOP weapon system.” “The other components and sub-components, as noted above, have been proprietary to [redacted] from the inception of this weapon system. The USG [U.S. government] does not own or control, via license or by other IP rights, any computer software, methodologies, or technical drawings,” the document adds. “[Redacted] was queried in August 2025 as to the potential of selling IP rights to the USG for the MOP weapon system and the USG was denied.”

lol. lmao

That being said, “over the course of the ~18 years of MOP development to the AURs acquired today the USG has, at certain junctures, been able to separate from the sole-source environment for this weapon with Boeing,” the J&A notes. “The USG was able to break away the Warhead Cases for the MOP under a weapon design agent effort, thereby giving the USG complete IP control over the Warhead TDP. Based on the IP ownership of this TDP the USG awards contracts competitively.”

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The details in the MOP J&A document also underscore broader issues surrounding IP rights and ‘vendor lock’ in the U.S. defense contracting space that have increasingly been coming to the forefront in recent years. Competition inherently creates opportunities to lower costs and diversify supply chains. A broader supplier base also offers benefits when it comes to scaling up production of key subcomponents and complete systems. The continued extent of Lockheed Martin’s control over the F-35 Joint Strike Fighter program is perhaps the most widely known example of the negative impacts of vendor lock. U.S. officials have been outspoken about the maintenance and sustenance challenges this has created, especially when it comes to the timely sourcing of spare parts, and the operational risks this creates. TWZ previously explored the particular issues surrounding the F-35 in an in-depth feature. Foreign F-35 operators, especially in Europe, are now also facing regular questions about what could happen to the jets if the U.S. were to cut off access to various sustainment pipelines in light of new diplomatic strains with Washington. Just this past weekend, Dutch State Secretary for Defense Gijs Tuinman caused a stir when he asserted it would be possible to “jailbreak an F-35 just like an iPhone” if necessary, as you can read more about here.

In recent years, successive U.S. administrations have made securing greater IP rights and ensuring opportunities for competition key elements in negotiating new defense contractors. As an example, the Air Force previously made clear that avoiding the F-35 program’s vendor lock was a top priority for the acquisition of the F-47 sixth-generation stealth fighter. President Donald Trump’s administration is now pursuing a host of new contracting reforms, in part to further break up the locks that private companies have on programs like the Joint Strike Fighter. “We will enable third-party integration without prime contractor bottlenecks. Success will be measured by the ability of qualified vendors to independently develop, test and integrate replaceable — excuse me, replacement modules at the component level throughout the system life cycle,” War Secretary Pete Hegseth said in a speech last November. “There’s no more complacency and no more monopolies.” At that time, Hegseth had also acknowledged Byzantine processes and other contracting hurdles that the U.S. military had created for itself over the years. How “the sole-source environment” surrounding the GBU-57/B continues to evolve now remains to be seen. A successor to that bomb, called the Next Generation Penetrator (NGP), is also now in development, and Boeing is involved in that effort, too. The Pentagon’s experiences with MOP, together with the new contracting reform push, are likely to inform how the replacement weapons are acquired. In the meantime, U.S. authorities continue to try to free elements of the MOP program from vendor lock, including now by repurposing technology originally designed for the ATACMS short-range ballistic missile.

In the past two days, the U.S. Air Force has sent six of its 16 E-3 Sentry Airborne Warning and Control System (AWACS) radar planes to bases in Europe. Two of those jets are now headed to the Middle East, and the others will likely follow, as a massive buildup of U.S. airpower continues ahead of potential strikes on Iran. The deployment of nearly 40 percent of all Air Force E-3s underscores how critical the aircraft remain, but also the challenges of meeting intense operational demands with a rapidly aging and shrunken-down fleet. It also further calls into question a puzzling Pentagon move to axe the purchase of replacement E-7 Wedgetail jets, which Congress has now reversed. ... As of yesterday, a pair of E-3s had arrived at RAF Mildenhall in the United Kingdom after traveling from their home station at Elmendorf Air Force Base in Alaska. Four more AWACS jets from Tinker Air Force Base in Oklahoma had also touched down at Ramstein Air Base in Germany. Online flight tracking data shows that the E-3s at Mildenhall have now departed and are headed toward the Middle East. There is widespread expectation that those aircraft, as well as the ones at Ramstein, will eventually make their way to Prince Sultan Air Base in Saudi Arabia. As noted, the U.S. Air Force currently has just 16 E-3s remaining in its inventory, roughly half the size of what it was just a few years ago. Six aircraft represent 37.5 percent of the total fleet. However, not all Sentry radar planes are available for operational tasking at any one time. For example, the average mission-capable rate for the E-3 fleet during the 2024 Fiscal Year was 55.68 percent, according to a story last year from Air & Space Forces Magazine. At the time of writing, this appears to be the most recent readiness data the Air Force has released for the E-3s. As such, the six forward-deployed AWACS jets represent an even larger percentage of the aircraft that can actually be sent out on real-world missions. This includes providing radar coverage for alert scrambles of fighter jets defending the homeland. This happens in some circumstances in the lower 48 states, but it is standard practice in Alaska, where there are usually a couple of E-3s typically stationed, with one on alert to launch in support of the fighters, which happens regularly. This is something we will come back to later on.

As TWZ has already noted, the deployment of E-3s to the Middle East is one of the clearest indicators that the final pieces for a major air campaign against Iran are falling into place. We made a similar observation about the appearance of AWACS aircraft flying close to the Venezuelan coast last December in the lead-up to the operation to capture that country’s dictatorial leader, Nicolas Maduro. The E-3 is best known as a flying radar station, with its array contained inside a spinning dome mounted on top of the rear of the fuselage. From its perch, the Sentry can track hostile and friendly air and naval movements across a broad area of the battlespace. Its look-down radar capability offers particular advantages for spotting and tracking lower flying threats, including drones and cruise missiles. Kamikaze drones, as well as cruise and ballistic missiles, would be a central feature in any Iranian retaliatory attacks on American assets on land and at sea in the Middle East. However, each Sentry, which typically flies with 13 to 19 mission specialists onboard in addition to a four-person flight crew, is much more than just its radar. It has other passive sensors and an advanced communications suite. Its combined capabilities make it a key battle management node during operations, and not just in the aerial domain. “The radar and computer subsystems on the E-3 Sentry can gather and present broad and detailed battlefield information. This includes position and tracking information on enemy aircraft and ships, and location and status of friendly aircraft and naval vessels. The information can be sent to major command and control centers in rear areas or aboard ships,” according to the Air Force. “In support of air-to-ground operations, the Sentry can provide direct information needed for interdiction, reconnaissance, airlift and close-air support for friendly ground forces. It can also provide information for commanders of air operations to gain and maintain control of the air battle.” Altogether, E-3 crews run the air battle, and also serve as a key battle management node during operations outside of the aerial domain. These command and control functions would be key in any future offensive operations against Iran, as well as for defending against any retaliation.

At the same time, the Air Force has been open for years now about the increasing challenges involved in operating and sustaining the E-3 fleet. The last new production Sentry aircraft were delivered in 1992, and were also some of the last derivatives of the Boeing 707 airliner to ever be produced. Air Force E-3s have received substantial upgrades since then, but the underlying aircraft are still aging and are increasingly difficult to support. Between 2023 and 2024, the Sentry fleet notably shrank from 31 aircraft down to its present size, in part to try to help improve overall readiness. The fact that U.S. E-3s are powered by long-out-of-production low-bypass Pratt & Whitney TF33 turbofans has been cited as a particular issue. ... “We basically have 31 airplanes in hospice care, the most expensive care there is. And we need to get into the maternity business and out of hospices.”

As already noted, the remaining E-3 fleet has continued to struggle with readiness issues amid consistently high demand. These issues have been compounded by resistance over the years to acquiring a direct replacement. When the Air Force finally did decide to supplant at least a portion of the Sentry fleet with newer and more capable E-7 Wedgetail airborne early warning and control aircraft, that effort turned into a protracted saga. The Air Force officially started down the road of acquiring E-7s in 2022, but the program became mired in delays and cost overruns. Last year, the Pentagon revealed its intention to axe the Wedgetail purchases in favor of an interim solution involving buying more of the U.S. Navy’s E-2 Hawkeye airborne early warning and control planes. That, in turn, would serve as a bridge to a longer-term Air Force goal of pushing most, if not all, airborne target tracking sensor layer tasks into space.

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Still, the truncated E-3 fleet clearly remains under immense strain. Sen. Murkowski’s comments last Summer also remain particularly relevant in light of the fact that two of the six E-3s recently sent across the Atlantic came from Elmendorf in Alaska. Recent tracking data suggests that there may only be one Sentry at Elmendorf now to meet operational needs in and around the High North, a part of the world that has only grown in strategic significance in recent years. There is also a question now about the availability of E-3 coverage should a crisis break out somewhere in the Indo-Pacific. If a major contingency were to emerge in the region tomorrow, the Air Force would be faced with a situation compounded not just by low availability rates and high demand elsewhere globally, but also the so-called ‘tyranny of distance.’ The sheer expanse of the Pacific, much of which is water, presents additional requirements when it comes to total coverage area and sortie generation rates to maintain a steady flow of aircraft on station around designated operating areas. Just getting to those areas and back could take many hours. Any future conflict in the region could occur over a massive total area, as well, which would be problematic for such a tiny fleet. All this is exacerbated by the age of the airframes and copious amount of maintenance to keep them flying in the best of conditions, let alone when deployed to the Pacific. As a point of comparison, China’s People’s Liberation Army (PLA), which would be fighting from its home turf during a major conflict in the Pacific, has made significant investments in a diverse and still growing array of airborne early warning and control aircraft. The Chinese see a force-multiplying need for these aircraft, and for large numbers of them to be able to cover a lot of territory at once, as you can read more about in this past TWZ feature.

Moving capabilities into space is an admirable goal, and has many advantages in theory, but the capabilities are not available now. Further, while some of the sensing can be distributed to other platforms and leveraged via advanced networking, there still is a place for an integrated and powerful airborne early warning and control solution, at least till the ‘all-seeing’ space layer is actually in place. Saving money now by leaving such a glaring gap, especially in the current security environment globally, appears bizarrely short-sighted.

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On Wednesday, Spanish President Pedro Sanchez defended imposing regulations on social media against algorithms that spread violence, pornography, or hate. He stated that online insecurity is not generated by minors, but rather by tech magnates who act without limits. Nevertheless, Sanchez will continue with his regulatory plans, building an alliance within and outside the European Union to address a problem that affects the mental health of young people and children.

He explained that detecting violent, pornographic, or hateful content propagated by algorithms requires clear accountability. Sanchez added that it is not censorship, but rather protection endorsed by doctors, scientists, parents, and a large part of society.

On Wednesday, the owner of social network X, Elon Musk, lashed out at Sanchez for his policies in favor of extraordinary regularization of immigrants and in favor of content control in the virtual world.

“Of course, the dirty Sanchez is a traitor to Spain,” the billionaire said in commenting on the far-right British anti-Islam activist, Tommy Robinson, who had previously stated that the Spanish president “should be arrested.”

“Pedro Sanchez on Elon Musk: In the end, insecurity is not generated by a foreign 14-year-old minor who is in the U.S. or in Spain; it is caused by these magnates who believe that the world is theirs and that they can do whatever they please.”

The X owner also accused Sanchez of being a “tyrant” and a “traitor” to Spain for banning social networks for children under 16 years old and for wanting to pursue digital platforms for not removing “hate and illegal” content.

Sanchez pointed out that, similar to what happens with regulations applied to other economic activities, authorities must force network users and entrepreneurs to assume responsibility when violent or pornographic messages are spread as a result of the algorithms’ design. “Someone must take responsibility,” he stressed.

The Socialist President also mentioned that freedom of expression does not protect the dissemination of manipulated images of minors with naked bodies created using artificial intelligence. Spain demands that this be made a crime.

He ruled out the possibility of the government abandoning social media and affirmed that they must remain active, defend reason in spaces turned into “sinister” environments by the technocracy, and that politics must be present in those spaces.

400 formal jobs have been lost each day since the start of the Milei administration in December 2023. On Wednesday, the General Confederation of Labor (CGT), Argentina’s largest labor federation, called a 24-hour general strike against the labor reform promoted by far-right President Javier Milei.

During a news conference in Buenos Aires, CGT Co-Secretary Jorge Sola said the strike could begin at midnight if the Chamber of Deputies ratifies that it will debate Milei’s bill on Thursday. “Be very clear that what you represent in the Chamber are the interests of the Argentine people,” CGT Co-Secretary Cristian Jeronimo told lawmakers in a message posted on social media, warning that if they pass the law, Argentina will come to a standstill from end to end.

“The CGT disagrees with this bill. We oppose it because it is unconstitutional,” Sola said, recalling that 400 formal jobs have been lost each day since the start of the Milei administration in December 2023. “If we are not heard, it will only deepen social unrest. We will lead all workers’ demands,” CGT Co-Secretary Octavio Argüello said.

On Wednesday, Argentine tire company FATE closed its plant in Buenos Aires province due to “changes in market conditions” and laid off 920 workers.

The announcement appeared on a sign posted at the factory entrance, while about a dozen police officers were deployed nearby to prevent workers from entering the facility.

FATE had operated in the country for 86 years and had a production capacity of 5 million tires per year, although it was producing only 150,000 tires at the time of the closure.

In 2024, the company had warned about the negative effects on Argentine industry of the indiscriminate import liberalization policy implemented by Milei.

According to a report by consulting firm PxQ, tire imports grew by an average of 34.8% between 2023 and 2025, leading to a 42.6% drop in prices in pesos.

In the first half of 2024 alone, the company lost more than US$30 million and announced nearly 200 layoffs “to adjust its structure to the new reality.”

On Wednesday morning, about 15 workers managed to enter the facility and, in a video shared on social media, called on employees to “defend jobs.”

Alejandro Crespo, secretary of the United Tire Workers’ Union of Argentina (SUTNA), declared a permanent workers’ assembly and said part of the staff would remain inside and outside the premises “until the factory opens its doors.”

In the first two years of the libertarian administration, more than 21,000 small and medium-sized companies have closed and more than 270,000 formal jobs have been lost, according to data from the Superintendence of Occupational Risks (SRT).

On Wednesday, maritime and river sector workers began a 48-hour strike at ports across Argentina, affecting infrastructure, fishing, and foreign trade, in protest of Milei’s labor reform.

“This measure aims to defend our labor rights, the stability of our jobs and the dignity of the maritime family in the face of initiatives that seek to undermine our activity,” the Maritime and Fluvial Union Federation (FESIMAF) stated.

The strike will disrupt normal operations at 17 port terminals nationwide, as these unions perform key tasks for vessel operations such as mooring and unmooring ships, directly impacting and causing delays in the loading of grain and other products.

“The Merchant Marine cannot be excluded from the legal framework that protects Argentine workers. This strike is not against the country or against production; it is in defense of national labor, our working conditions and navigation safety,” the union added.

FESIMAF Secretary Mariano Moreno said naval activity could shift from being a regulated and formal sector “to one governed by individual agreements and single-tax registration, which would lead to the dismantling of the profession.”

FESIMAF currently includes unions such as the United Maritime Workers Union (SOMU), the Center of River Captains and Officers, the Naval Drivers Union (Siconara) and other organizations representing seafarers and maritime and river navigation personnel.

On Wednesday, the Federation of Argentine Port Stevedores (FEPA) announced it would join the general strike called by the Confederacion General del Trabajo. “The reform puts collective bargaining agreements, working conditions and job stability in the sector at risk,” FEPA said.

Legal reforms preserve state ownership of PDVSA while introducing expanded operating contracts. The research group Truth Mission (Mision Verdad) has released a study analyzing the partial reform of the Venezuelan Hydrocarbons Law, which was approved by the National Assembly on January 29 and allows for greater participation of private investors in oil activities.

Driven by Acting President Delcy Rodriguez, the oil industry modernization maintains the Venezuelan state as a decisive and principal actor in various public-private partnership schemes. This is explained in detail in the Truth Mission study, which is reproduced below.

“The partial reform of the Organic Hydrocarbons Law (LOH) is at the center of the debate in Venezuela, given that, from various angles of politics, a set of interpretations of the text have been made, in many cases through political biases and deliberate misrepresentations. The approved text is a reform that builds upon the basic law presented in 2002 by then-President Hugo Chavez through enabling powers to legislate.

In 2006, the LOH was modified to give legal form to the mixed enterprise scheme, within the framework of the re-nationalization process of oil assets, especially in the Orinoco Oil Belt. The 2026 reform ratifies and, in some aspects, deepens essential elements of the previous legislation.

But, without a doubt, it creates the legal basis for a complete strategic adaptation of the Venezuelan hydrocarbon industry, considering elements of the present context: the persistence of an extended and adverse cycle of illegal sanctions on hydrocarbon activities, and the investment, modernization and growth needs of this activity—the most economically important in Venezuela.

The ‘Privatization’ of PDVSA

The new LOH reaffirms that Petroleos de Venezuela (PDVSA) or, as it is called, the “company exclusively owned by the Venezuelan State and its subsidiaries,” is of an inalienable and non-transferable nature, preserving the public domain and the ownership of the nation over it, in accordance with what is stated in Article 141 of the National Constitution, cited in the reform in its Article 1.

The new text does not affect this essential principle, as it remains identical to that established in the laws of 2002 and 2006, in accordance with the Bolivarian Constitution.

Primary Activities

In the hydrocarbon sector, primary activities—commonly called “upstream”—are the processes that encompass the exploration, extraction, collection, transportation, and initial storage of crude oil and natural gas. These stages search for deposits, drill wells and manage production from the subsoil to processing centers, which could be refineries or terminals for dispatch and/or marketing, which would already be part of the set of secondary activities.

The new law ratifies the expansion of the scope of participation in primary activities, which was previously exclusively in the hands of state-owned companies, so that national or foreign private companies can also participate. Is this really new? Definitely not. The reference to “ratify” alludes to reaffirming something that already exists.

The presence in Venezuela of foreign companies such as Chevron, Repsol, and CNPC is possible due to the provisions established by the 2006 reform, which endorsed the joint venture regime under the Hydrocarbons Law. These foreign companies participate directly in primary activities in Venezuelan fields. Likewise, the Anti-Blockade Law facilitated agreements that allowed private investment in these processes through Productive Participation Contracts (CPP). Private participation in primary activities was already well-established and was addressed in another complementary law on the matter: the now-repealed Law on the Regulation of Private Participation in Primary Activities (2006). This law would not exist if there were no activities to regulate.

What does this mean in concrete terms? It means that Venezuela could, for example, enter into advanced hydrocarbon exploration contracts with companies that possess technologies PDVSA lacks. Or that a private company could assume operational management of a field, for various financial or technical reasons. Thus, according to the new Article 23, primary activities will be carried out by three types of companies classified according to their type of ownership: the state-owned (PDVSA), mixed companies, and “private companies domiciled in the Bolivarian Republic of Venezuela, within the framework of contracts signed with companies exclusively owned by the Republic or its subsidiaries.”

Nothing new under the sun.

About Joint Ventures

Joint ventures are ratified in the new Hydrocarbons Law (LOH) as part of PDVSA’s management and partnership model with other companies, both national and foreign. This was already established in the 2006 LOH, and the spirit of that era is reaffirmed now. These are referred to as “companies in which the Republic or a public entity owns a share greater than fifty percent (50%) of the share capital, which gives it shareholder control,” according to Article 23 of the reformed law.

In light of this, it is not true that PDVSA will now undergo a process of “de facto privatization” of its subsidiaries under the guise of joint ventures, nor that it will grant majority shares in said companies. Doing so is impossible according to the new Hydrocarbons Law. Therefore, there is no impact on the shareholding situation of mixed companies currently established or that may be formed in the future.

Productive Participation Contracts

The new law recognizes the types of contracts that can be made by PDVSA and its subsidiaries, according to the new Article 40. As explained, Productive Participation Contracts (CPP) transcend the Anti-Blockade Law and take shape through the figure of “Contracts for the Development of Primary Activities.” These are broad contracts—covering services, exploration, and product extraction—under a model known as “comprehensive management of primary activities.” The private party in these contracts, whether domestic or foreign, is referred to as the “operator.”

Is this really something new? Absolutely not. PDVSA has been authorized to enter into contracts with private companies, both domestic and foreign, for primary activities. This explains, for example, the presence in Venezuela of multinationals like Halliburton and Baker Hughes, which provide oil services.

However, and this is the important part, this law does provide additional incentives that translate into greater responsibility and operational autonomy for the companies listed in the contracts, depending on the specifics of the projects. Contracts for the Development of Primary Activities are specially designed for “green fields,” or areas with underground resources that have not yet developed infrastructure or received investment. The LOH, as is fitting in the spirit of all laws, has been reformed in accordance with the particularities of the times. The 2026 text recognizes several objective conditions.

First, the conditions in the oil business have changed significantly since 2002 and 2006. Investments are now more expensive, the market is more volatile, and there is competition from new technologies in the battle for energy resources (the energy transition). In the long term, this context makes investments more expensive, reduces profits, and increases risks.

Second, the national hydrocarbon industry is burdened by a cumulative 10 years of coercive sanctions, divestment strategies in Venezuela, asset freezing—both liquid and capital goods—and direct impact on the financing mechanisms (petro-bonds) of PDVSA and the nation. Third, most of Venezuela’s oil reserves are heavy and extra-heavy crude, which requires new technologies and costly investments to be extracted and diluted for commercialization.

These conditions impose a stark reality: neither PDVSA nor the Venezuelan state has the resources to invest heavily in new developments and oil fields. Therefore, further incentives are being offered to attract new investment in these undeveloped oil fields. This does not imply a loss of sovereignty; it implies creating comparative advantages to attract investment where it is needed.

To determine whether these types of contracts involve a loss of sovereignty or are harmful to the nation, it is necessary to observe what is stated in Article 43:

Once the term of the contract for the development of primary activities has ended, the operating company must return the leased assets and transfer ownership, free of any encumbrance, to the company wholly owned by the Republic or its subsidiaries (PDVSA), of all assets incorporated, constructed or acquired during the term of the contract, including all data obtained, generated, processed and interpreted, without this generating any obligation of payment or compensation.

The new Hydrocarbons Law is clear and, in fact, resembles the 1946 law in that it refers to the reversion of assets to the Republic upon termination of contracts, without the need for a nationalization process that would entail high costs for the nation. This is a huge difference compared to the legal framework of the Operating Agreements of the 1990s, which involved high compensation payments and costly legal proceedings when the 2006 nationalization occurred. The cases of Exxon and ConocoPhillips are a prime example.