Venezuela holds the world’s largest crude reserves but has suffered from decades of mismanagement, underinvestment, and sanctions that have driven output down from approximately 3 million barrels per day (bpd) to below 1 million bpd currently. Recent reforms by the Venezuelan government aim to introduce greater autonomy for foreign operators, reduce taxes, and stimulate capital inflows. However, caution remains among top industry executives who request clearer legal frameworks and political stability before engaging in major long-term projects.
The current oilfield services environment is constrained; operators such as SLB, Baker Hughes, and Weatherford hold licenses that prevent the operation or expansion of drilling rigs. In December, the country had only two active rigs, while much equipment requires extensive repairs. U.S. licenses issued to trading houses Vitol and Trafigura have helped resume shipments, increasing exports to about 800,000 bpd in January. The new general license is expected to streamline approvals, encourage rig activity, accelerate exports, and enhance refining and infrastructure rehabilitation, with some provisions likely prioritizing U.S. firms under the Trump administration’s “America First” policy.
This article was curated and published as part of our South American energy market coverage.
