How Sustainable is Venezuela's Oil Recovery?

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Venezuelan oil production has seemingly improved, based on monthly U.S. federal data. But earthquake damage and an uncertain political future are creating clouds on the horizon.

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Venezuelan Oil Output Up Nearly 18% from Last Year

Based on U.S. import data, Venezuelan crude oil production is on the rise, though it will take long-term commitments for the nation to achieve any degree of sustainability, reports found.

Industrial Info Resources is tracking 16 projects related to oil production in Venezuela, with the largest by investment value controlled by state-run Petroleos de Venezuela (PDVSA). A program in the Tomoporo field is grassroots, suggesting the sector is primed for growth.

Industrial Info Resources offers more information on these developments in its Global Market Intelligence (GMI) Oi & Gas Project Database, where readers can find details--including construction schedules, investment values and necessary equipment--in a detailed list of project reports.

Secondary sources reporting to economists at the Organization of the Petroleum Exporting Countries (OPEC) put Venezuelan crude oil production at 1.1 million barrels per day (bpd) on average for July. That compares with a full-year 2025 average of 941,000 bpd.

The recovery follows the U.S. arrest of former Venezuelan President Nicolas Maduro in January. The original regime is largely intact, but it is opening its doors to investors.

On Tuesday, three sources familiar with negotiations told Reuters that upstream services firm SLB, formerly Schlumberger, was granted access to oilfield data in Venezuela, helping PDVSA update its databases.

According to Industrial Info Resources data, all 11 plants tied to oil and gas production in Venezuela are operational following disastrous twin earthquakes that rocked the nation in late June. Venezuela sits on the world's largest proven oil reserves, estimated at more than 300 billion barrels, or roughly 17% of global reserves.

Readers can learn more about these developments from a detailed list of project reports.

Deals are to be had. Early this year, Petropiar S.A., which is a Venezuelan joint venture involving Chevron Corporation, secured rights to develop parts of the Orinoco Belt, one of the richest oil deposits in the world.

Apart from production, the joint venture operates an upgrader in Anzoategui, a state in northeast Venezuela, with an annual capacity of 200,000 bpd. Readers can learn more about the upgrader from a detailed plant profile.

Upgraders break down heavier types of crude oil into a lighter stream known as synthetic crude. That, in turn, could support the nation's exports.

For the week ending August 14, U.S. federal data show imports of Venezuelan crude oil averaged 730,000 bpd, compared to no barrels at all last year. While the U.S. is exerting influence on the government in Caracas, supplies to the U.S. are limited due to the war in the Middle East. Few barrels have arrived from legacy suppliers such as Iraq and Saudi Arabia, leaving U.S. refiners leaning heavily on the Americas for feed stock.

Speaking from Houston earlier this month, U.S. Energy Undersecretary Kyle Haustveit said that U.S. refiners are taking on about half of Venezuela's crude oil exports.

By the Numbers

• 1.1 million bpd from Venezuela is a record for the year, OPEC data showed
• 17% of global oil reserves are found in Venezuela

Long-Term Prospects Uncertain

But it could require hundreds of billions of dollars and more than a decade of commitments to fully revive Venezuela's oil sector. A report from the Oxford Institute for Energy Studies found that an abundance of resources is not enough to achieve substantial, long-term production recovery.

"The central issue is no longer whether Venezuela has sufficient resources, but whether it can rebuild the technical, institutional and infrastructural conditions required to convert them into sustained production," the report read.

Investors may be hesitant to go all-in on Venezuela, considering the uncertain political future both in Caracas and in Washington D.C., where U.S. President Donald Trump and the Republican Party are facing declining popularity amid affordability issues facing voters, with the ongoing war in the Middle East only adding to the economic pressures.

Last week, Reuters reported that Venezuela was forced to import a de facto ban on exports as vessels queued up for reserves. Tankers may have to wait a month because of issues tied to the nation's crumbling infrastructure and lingering power outages.

Industrial Info Resources is tracking all nine refineries in Venezuela, with the 140,000-bpd El Palito Refinery set to curtail operations ahead of maintenance in September. Readers can learn more from a detailed list of plant profiles.

On Wednesday, meanwhile, the International Rescue Committee (IRC) said that after experiencing years of humanitarian issues, the global focus should not shift away from earthquake recovery.

"Venezuelans will need sustained international support to recover and rebuild," said Everardo Esquivel, a member of the IRC's emergency response team.

Key Takeaways

• Venezuela is not out of the woods yet, despite some signs of recovery
• An aid group said now is not the time to become complacent on Venezuela

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).