VENEZUELA’S legislature has advanced a Bill to loosen state control over the country’s vast oil sector in the first major overhaul since the late socialist leader Hugo Chavez nationalised parts of the industry in 2007.

The legislation would formally break decades of public control over the world’s largest oil reserves and allow foreign private companies to invest in them.

It also offers companies the option of settling legal disputes through arbitration in international courts, rather than just local courts — potentially opening the government up to the controversial Investor-State Dispute Settlement system.

Following the US kidnapping of former President Nicolas Maduro earlier this month, the Trump administration has demanded acting President Delcy Rodriguez allow US fossil fuel firms access to Venezuela’s oil, threatening further attacks.

Following the shocking breach of international law, US President Donald Trump said that if Ms Rodriguez “doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro.”

The changes will also see the government slash extraction taxes.

The president of Venezuela’s National Assembly, Jorge Rodriguez, told politicians at the start of Thursday’s debate that the Bill aims to “allow an accelerated increase in production” of oil in Venezuela.

“Oil under the ground is useless,” he said, referring to the need to boost oil production and open up exploration opportunities.

After two hours of discussion, politicians gave initial approval to the Bill on Thursday and sent it to a second round of debate, yet to be scheduled.