Venezuela’s Oil Revival Accelerates as U.S. Majors Push Trump’s New Energy Order

Venezuela’s Oil Revival Accelerates as U.S. Majors Push Trump’s New Energy Order

Mon, August 17, 2026 at 6:00 PM GMT+3 7 min read

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Following the Washington-led removal of Venezuela's previous president, Nicolás Maduro, from office on 3 January this year, U.S. firms are pushing hard to keep increasing oil production from the hydrocarbons giant, in line with President Donald Trump's grand plans for the country within his new world order. The foundation for such output increases is extremely solid, as Venezuela still holds the world's largest proven crude reserves -- roughly 303 billion barrels, or about 17% of the global total. Most of this is extra-heavy crude oil from the Orinoco Belt that requires more technical expertise to handle than lighter grades but is cheaper to lift and often more profitable to process, with the challenge lying in transporting, upgrading, and refining it, not extracting it. Moreover, of its 14 supergiant oil fields, 11 retain more than half of their original reserves. Once up and running to something approaching full capacity, the country is to play a key role in the 'Americas' geographical sphere -- one of three such regions, as delineated recently in the U.S.'s '2025 National Security Strategy' -- so where are we now in this development arc following comments in the past week or so from U.S. oil and gas giant, Chevron?

According to chief financial officer Eimear Bonner, during a recent earnings call, the U.S. supermajor has increased its oil production in Venezuela from 40,000 barrels per day (bpd) to 250,000 bpd over the past few years. And, based solely on its three current joint ventures in the country, output has risen over just the past six months by 12% year on year to 280,000 bpd. This followed the mid-April announcement of an asset-swap agreement with Petróleos de Venezuela, S.A. (PDVSA), under which Chevron received an additional 13.21% interest in the Petroindependencia joint venture, increasing its total stake to 49%. The U.S. firm's other two joint ventures include Petropiar (in which a Chevron subsidiary holds a 30% interest and has the rights to develop the adjacent Ayacucho 8 area in the Orinoco Oil Belt), and Petroindependiente (in which it has a 25.2% non-operated interest in the west of the country). Looking ahead, Bonner added that Chevron expects its production across Venezuela to rise by 50% between now and the end of 2028, which would bring the total up to 420,000 bpd. Across the country as a whole, July saw average crude oil production by Venezuelan state oil company PDVSA and its foreign partners increase by 20,000 bpd to 1.21 million bpd, according to Ministry of Hydrocarbons data. Nearly all of this is now exported, compared to an average of 847,000 bpd in 2025. That said, back in the early 2000s, Venezuela's crude production was running at over 3 million barrels per day.

Moreover, Chevron is by no means the only oil major actively working with the government to look at other opportunities. Spain's Repsol is the key non-U.S. supermajor currently pushing for major oil output rises, targeting a tripling of production there in the next two or three years, according to a recent comment from chief executive officer Josu Jon Imaz. The Spanish firm holds 40% of its Petroquiriquire Occidente joint venture with PDVSA and currently produces 45,000 bpd of crude oil, but recently it has amended its operational scope to integrate the Tomoporo and La Ceiba fields into the concession. Repsol also recently signed a memorandum of understanding (MoU) to assess and develop the Horcón Area southeast of Lake Maracaibo. It links the Barúa and Motatán fields, which Repsol already operates, with the aim of capturing new light crude reserves.

Natural gas expansion projects are also being worked on in parallel with those in oil, with Repsol and Italy's Eni having finalised a joint strategic arrangement with the Ministry of Hydrocarbons for a major gas project at the jointly owned Cardón IV asset in the offshore Perla field, which already supplies around 30% of Venezuela's gas demand. Moreover, following a preliminary MoU signed in April, Great Britain's oil and gas supermajor BP officially set up a permanent office in Caracas, appointed a dedicated country manager, and secured an official license to explore and develop Phase 2 of the offshore Loran gas field. The British firm will act as the primary operator of the venture, holding equal interest alongside Abu Dhabi National Oil Company's international arm (XRG) and Qatar-based UCC Holding. The Loran Phase 2 block alone contains an estimated 4 trillion cubic feet (Tcf) of recoverable natural gas, but it extends across the border into the Trinidadian Manatee/Manakin fields, which are estimated to contain up to 10 Tcf of gas. According to BP, it will pipe the extracted gas directly to Trinidad, rather than building new facilities in Venezuela, whereupon it will be liquefied at the Atlantic LNG export terminal (in which BP owns a 45% stake) and shipped to global markets from there. BP has also recently finalised a separate preliminary agreement for the Carúpano East Block, located in Mariscal Sucre maritime area off Venezuela's northeastern coast.

One problem that still constrains investment by many firms -- especially the non-majors -- is Venezuela's historically heavy tax burden for companies, even if investors are losing money. One part of this is the fixed 30% baseline royalty on every barrel of oil extracted (tax on gross revenue, paid first), regardless of global oil market price drops. Another is the 50% corporate income tax rate (tax on net profit, paid last) way higher than regional competitors like Brazil, Guyana, or Colombia. And there is a mandatory alternative minimum tax that means the government collects 50% of the total gross value of extracted oil before operating costs are even calculated. The first attempt, post-Maduro-removal, to rectify Venezuela's punitive tax systems for foreign oil and gas firms -- the 2026 Hydrocarbon Law Reform -- introduced by acting president Delcy Rodríguez sought to replace the web of extra levies with a single Integrated Hydrocarbons Tax (IHT) capped at 15% of gross revenue. However, this still allows the Ministry of Hydrocarbons total discretion to adjust individual contract rates and project variables, creating its own high degree of political and regulatory uncertainty. Given this, it appears that foreign oil and gas firms are looking to bypass the law entirely and instead press for customised, private contract terms (model contracts) and targeted U.S. sanctions exemptions.

This approach has so far met with broad support from Washington, given how central the build-out of Venezuela's oil and gas sector is to Trump's new global oil market order, as alluded to in the 2025 National Security Strategy. The U.S. President wants the world's geopolitical system split into three geographical spheres, dominated by a major power in each. China would hold the primary role in Asia, while Russia would either dominate or significantly influence Europe, depending on how any future conflict between European NATO members and Moscow unfolds. But, at the top, the U.S. would maintain overall dominance and exert direct influence across the Americas (North and South America). Given that energy underpins the economies -- and thus politics -- of every country in the world, shifting the centre of dominance in global energy supplies to the Americas is a core part of that aim. The U.S. is playing its part toward that, pumping oil at record highs, around a baseline of 13.6 million bpd, with plans for more down the line. Of the other major oil-producing countries in the Americas, Venezuela is top of Washington's development agenda, followed by Argentina and then Brazil.

By Simon Watkins for Oilprice.com

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