January brought massive change for Venezuela. After almost 13 years, Nicolás Maduro was removed from power and, within the month, the path for a revival of the country’s oil sector was laid.
The opportunity is huge. Venezuela is home to the world’s largest proven oil reserves. Throughout the late 1990s and early 2000s, it produced more than three million barrels per day. However, financial mismanagement and corruption pushed the country into economic collapse, and regulations around joint venture (JV) stakes drove many international operators out.
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The amendment to the Organic Hydrocarbon Law in January 2026 could change things for the better, but investors are cautious. So, as Venezuela adjusts to what the future looks like post-Maduro, will oil majors return?
In this episode, editor of Offshore Technology Eve Thomas and editor of Investment Monitor Eugenia Perozo discuss whether oil majors will return to Venezuela.
Venezuela’s oil resources
Venezuela is home to the world’s largest proven oil reserves; however, geological endowment doesn’t automatically translate into operations. Venezuela produced between 900,000 and 1.02 million barrels per day in 2025, making it only the 20th-largest producer globally.
“Venezuela’s resources are predominantly heavy, extra heavy and sour crude, which are difficult to export,” explains Thomas. “Heavy crude oils are made up of longer carbon chains, making them denser and more viscose, meaning that they must be mixed with expensive diluents, adding around $15 per barrel to costs.”
She adds: “As a result, Venezuela is left exporting raw crude to specialised buyers, particularly the US and India, at lower prices.”
The Organic Hydrocarbon Law
In 2001, Venezuela’s then-president Hugo Chavez introduced the Organic Hydrocarbons Law, which established state ownership over all hydrocarbon deposits. A national decree in 2007 amended the law to specify that foreign oil companies could only hold stakes worth 40% or less, theoretically providing an upper hand to national oil company PDVSA.
However, Thomas explains that “operators who refused to restructure their assets under this 2007 decree were expropriated, including majors such as ExxonMobil and ConocoPhillips”.
She adds: “Even companies that did negotiate to stay, such as Chevron, found that by the 2010s, PDVSA was not delivering on its financial commitments, failing year-on-year to cover its share of JV costs.”
January’s amendment to the Organic Hydrocarbons Law marked a new era for Venezuela’s oil production. The state still preserves ownership of deposits, but private parties are now allowed to operate outside of majority state-controlled JVs.
“Of course, time will tell to what extent the amendment has impacted investment and how seriously companies are looking at the opportunity, but there are early forays into Venezuela’s oil scene,” notes Thomas.
Limitations and current infrastructure
“Decades of economic mismanagement, corruption and tough US sanctions drove eight million people, especially the country’s young, able workforce, abroad,” says Perozo.
This is reflected in the fabric of the country’s oil and gas sector, with reports suggesting that much of Venezuela’s extraction and upgrading infrastructure has been allowed to decay beyond repair. Massive investment would be required to restore production in Venezuela to the highs of the early 2000s, and there are questions around whether the oil majors will consider the investment worthwhile.
“It is worth remembering that many businesses that may have once boomed in the country had not likely been there for years,” says Perozo.
However, companies are interested, and a series of meetings in Caracas in April explored potential opportunities to reconstruct Venezuela’s grid. Infrastructure problems loomed large in discussions, however, and an executive for an equipment provider who had worked with PDVSA told Reuters he “returned very sceptical from Venezuela”, adding that “the power plants have not been properly repaired in ten years, so the needs are almost infinite – but they still have no clue how we would get paid”.
General licences, US sanctions and Executive Order 14373
General licences have been used to encourage commercial activity in Venezuela’s oil sector, including General Licence 50A, which authorised a select group of major energy operators to re-enter the market without specific individual licences.
Meanwhile, the lifting of US sanctions on Venezuela’s financial entities has enabled the entry of US dollars into the country.
“The entry of dollars is particularly important,” says Perozo. “By the end of 2025, the local currency had experienced nearly 500% inflation, which has continued into 2026. Removing sanctions also enables Venezuela to reconnect with the international financial system, which it has been alienated from for nearly a decade.
“It is an essential first step for Venezuela to be recognised and eligible for recovery credits from the International Monetary Fund and the World Bank.”
The US has also looked to boost Venezuela’s oil scene through Executive Order 14373: Safeguarding Venezuelan oil revenue for the good of the American and Venezuelan People. The order declared that revenues derived from Venezuelan natural resources or diluents must be paid into foreign government deposit funds, protecting the sector from private parties with arbitration awards.
“It appears that the Trump administration is seeking to stabilise Venezuela’s economic and political scene,” says Thomas.
Politics makes oil investment in Venezuela uncertain
“These new regulations we have discussed are mostly untested,” says Perozo. “There is also the possibility of regulations changing once again if a new democratic government comes in.”
Questions persist around the long-term leadership of Venezuela. Opposition leader María Corina Machado has strong claims to the presidency, but whether she can safely return, or what her eventual return would mean for foreign investment in oil in Venezuela, remains unclear.
“What happens when Machado returns will be crucial to understanding US priorities in Venezuela. Is the country heading towards a democratic transition that will enable good governance necessary for foreign investment, or will a more compliant version of Maduro’s government be enough to appease US interests?” asks Perozo.
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