Venezuelan president Nicolas Maduro used his control of the supreme court to effectively dissolve the opposition-controlled national assembly, a provocative move that promises to further isolate the oil-producing country, which Venezuelan media say is likely to clear a way for the Venezuela-T&T gas deal, among other things.
Opposition leaders are denouncing the measure as a constitutional coup and are demanding presidential elections next year. Some are calling for Venezuelans to take to the streets.
The court's constitutional chamber announced Wednesday night that it is immediately assuming all constitutional powers of the assembly because the current legislature has committed multiple "constitutional omissions" that nullify all acts, resolutions and laws passed by the body since January 2016.
The high court's announcement is part of a lengthy ruling that also bestows unlimited executive powers on Maduro.
Yesterday's court ruling explicitly authorizes Maduro to utilize his executive powers to create and approve new joint ventures, infrastructure contracts, and financial deals including loans.
This feature of the high court's ruling is intended to counter the legislature's repeated warnings to potential foreign investors and lenders that any deals not approved by the assembly would never be recognized as legal by a post-Maduro government.
Joint ventures would allow the regime to leverage oil and mineral assets for credit, similar to PdV's recent collateralization of its US downstream subsidiary Citgo and more than $60bn in oil-backed loans to China since 2007.
Among the foreign oil companies with assets in Venezuela are Chevron, Shell, Total, Spain's Repsol, Italy's Eni, Russia's Rosneft, and China's CNPC.
Shell recently signed a preliminary agreement with PdV and its Trinidadian counterpart NGC to export offshore Venezuelan natural gas to Trinidad and Tobago.
The effective dissolution of the legislature also coincides with Opec efforts to stabilize the oil price. Caracas is among the leading Opec members behind a push to extend and deepen production restraints that have so far fallen short of the group's expectations.
Maduro's expanded executive authority allows him to decree an unlimited "state of exception", and order the arrest and prosecution under military law of all legislators who recently approved a resolution asking the Washington-based Organization of American States to apply the democratic charter against Venezuela. The charter's provisions would expand external scrutiny and could lead to the country's ouster from the body altogether.
There was no immediate reaction from Washington, which has called on the regime to honor the constitution and hold elections as soon as possible. Similar calls have come from Latin American countries, including Argentina, Brazil, Chile and Uruguay.