Caracas, Jan. 30 -- Venezuela's National Assembly approved sweeping changes to the country's oil laws, granting foreign energy companies greater operational control and opening the door to sharply reduced royalties, a move that could reshape the nation's energy sector, The New York Times reported.

On Thursday, lawmakers enacted legislation that allows overseas firms to directly manage production projects, effectively reducing the role of state-run Petroleos de Venezuela, and permits companies to settle disputes through international arbitration rather than Venezuela's courts, The New York Times reported.

The overhaul also enables authorities to lower taxes and royalties paid to the government, although Petroleos de Venezuela will remain...