Is Venezuela's Energy Sector on the Mend?

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

Summary

Venezuelan crude oil exports to the United States have been as high as 735,000 barrels per day, overtaking Mexico to become the No. 2 supplier. The energy sector is in a bit of a revival since the ouster of Venezuela's former president in January.

Venezuela a Top Oil Exporter to United States

Some 10 months after U.S. military forces arrested its former president, Venezuelan crude oil exports to the United States are now second only to Canada in volume.

Data released Wednesday from the U.S. Energy Information Administration, part of the U.S. Department of Energy, show Venezuelan crude oil exports to the United States averaged 636,000 barrels per day (bpd) over a four-week period ending October 2. That marks a 425% increase year-over-year.

That places Venezuela at the No. 2 spot, behind Canada with its average of 3.7 million bpd over the same period. That's comparable to year-ago levels and comes as Middle East exporters such as Saudi Arabia are limited by simmering regional conflict.

Venezuelan deliveries to the United States were as high as 743,000 bpd earlier this year.

Historically, Mexico was in second place, but dynamics have changed since U.S. military forces seized former Venezuelan President Nicolas Maduro from his compound in Caracas in January. Since then, the U.S. government has assumed tacit control over the country's energy sector, while working to open the doors to international investors.

The U.S. government and the interim government of Venezuela tapped North American Blue Energy Partners (NABEP) in late August to lead developments. NABEP in turn handed the U.S. Department of Defense a 35% stake in the company, while the State Department secured the rights to 20% of production "from all current and future fields NABEP will operate." For more on that, see September 2, 2026, article - U.S. Defense Department to Take Minority Stake in Venezuelan Oil.

Since January, Industrial Info Resources has seen only a handful of issues that would hamper the nation's dilapidated energy sector as investments trickle in even amid political and environmental challenges.

According to Industrial Info Resources data, all of the plants tied to oil and gas production in Venezuela were operational following disastrous twin earthquakes that rocked the nation in late June. The strong earthquakes left coastal states in ruins and forced the temporary closure of Venezuela's main airport.

More recently, Industrial Info Resources reported that Petroleos de Venezuela, better known as PDVSA, shuttered its 295,000-bpd refinery in Cardon, Venezuela, on October 6 following a fire.

Data from Industrial Info Resources show there are 16 oil-related projects associated with the Venezuelan oil sector with a combined investment value of $148 million. Of those, PDVSA is behind the largest with projects tied to the Junin oil field.

There are Deals to Be Had

Slowly, but surely, international entities apart from legacy operators such as Chevron are moving into the Venezuelan energy sector. U.S. President Donald Trump last month touted what he said was the largest oil deal in history, staking claims to 17 Venezuelan oil fields that the White House said combined for 65 billion barrels in proven reserves.

Last week, U.S.-headquartered upstream services firm Baker Hughes said it signed agreements to repair and expand the nation's natural gas infrastructure. Further agreements cover future oil and gas prospects. Lorenzo Simonelli, the company's top brass, said the nation holds "tremendous potential" to become a major player once again on the global energy landscape.

British energy company BP had earlier brokered deals in Venezuela to help develop parts of the Loran natural gas field, which the company said holds some 4 trillion cubic feet of recoverable gas reserves.

While much attention has been paid to its vast crude oil deposits, its associated gas reserves could support the nation's recovery even further. A profile of the natural gas potential from the Center for Strategic and International Studies from April found Venezuela holds around 197 trillion feet of reserves that are associated with crude oil deposits.

It would take years to overcome chronic under-investment and poor management of the nation's energy sector, however. Much of its infrastructure is deteriorating, complicating efforts to improve the energy infrastructure in a country that's been previously saddled by international sanctions.

By the Numbers

• 197 trillion: Cubic feet of associated gas reserves in Venezuela
• 65 billion: Barrels in proven reserves claimed by U.S. government

Key Takeaways

• The Venezuelan energy sector is drawing investor interest.
• Baker Hughes becomes the latest to wade into the nation's energy sector.

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 validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).