In the 1990s, Venezuela opened its Upstream Oil sector to private investment. This collection of policies, called apertura, facilitated the creation of 32 operating service agreements (OSA) with 22 separate foreign oil companies, including international oil majors like Chevron, BP, Total, and Repsol-YPF. Under these contracts, companies operate oil fields, and PdVSA pays these companies a fee and purchases the produced crude at a price pegged to market rates. PdVSA also offered eight blocks under risk/profit sharing agreements (RPSA), under which the company has an option to purchase up to a 35 percent equity stake in the project, if the foreign Operator discovers commercial quantities of oil in the exploration phase. Finally, PdVSA holds shares in four strategic associations that produce extra-Heavy Crude, for eventual upgrading to syncrude In 2001, Venezuela passed a new Hydrocarbons Law that superseded the previous 1943 Hydrocarbons Law and 1975 Nationalization Law. Under the 2001 law, royalties paid by private companies increased from 1-17 percent to 20-30 percent. Further, the law guarantees PdVSA a majority share of any new projects. Finally, the law stipulates that all future foreign investment would be in the form of joint ventures (JV) with PdVSA, rather than the aforementioned OSA, RPSA, or strategic associations. In August 2003, Venezuelas Ministry of Energy and Mines (MEM) transferred PdVSAs 33 operating contracts, the four strategic associations, and the risk exploration contracts to subsidiary Corporacion Venezolana de Petroleo (CVP). The move intends to allow PdVSA to concentrate on production from its own fields, while CVP will administer the agreements. Because of the doubts, discussed above, about PdVSAs ability to fund sufficient investment in expanding Crude Oil production capacity, Venezuela will likely need to depend heavily upon foreign operators to meet its production goals of 5.84 million bbl/d by 2012. However, recent events have begun to cloud the investment climate in Venezuelas oil sector. In November 2004, President Chavez announced that the royalty rate on the four strategic associations would increase from 1 percent to 16.6 percent, the highest rate allowable under the older hydrocarbons laws. MEM also announced in April 2005 that foreign operators must convert all OSA projects to new JV agreements under the terms of the 2001 Hydrocarbons Law by the end of 2005, including the higher royalty, tax rates, and level of PdVSA ownership stipulated by the 2001 law.