U.S. Companies Scouring for Deals for Venezuelan Oil

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

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Summary

U.S. Energy Secretary Chris Wright is expected to travel to Venezuela as early as this week. Seven months after U.S. forces arrested the nation's former president, U.S. imports of Venezuelan crude are up more than 700% year-on-year.

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'Real' Discussion on Exclusive Oil Deals for U.S. Companies

Seven months after U.S. military forces arrested former Venezuelan President Nicolas Maduro from his compound in Caracas, various media reports suggested U.S. officials are working to secure deals to develop more than a dozen crude oil reserves.

"This is real and being discussed at the highest levels of the U.S. and Venezuelan governments," a source familiar with the matter told the Reuters news service on condition of anonymity in a report published Thursday.

Industrial Info Resources is tracking more than a dozen upstream projects in the Venezuelan oil sector. Among the largest by investment value is a workover program for the Junin-5 field, located in the broader Junin Block. Readers can access details of the project, including construction timelines, key contact details, and equipment and service needs, by clicking here.

State-run Petroleos de Venezuela (PDVSA) will perform well-workover interventions on 40 closed wells to fix mechanical issues, and replace tubing as well as downhole equipment.

Developers put the estimated reserves in place there at around 35 billion barrels. It's situated in the Orinoco Belt, among the largest oil deposits in the world.

U.S. Scrambling for Heavy Crude Oil

The development comes as the United States is forced to lean on suppliers from the Americas to offset disruptions to Middle East producers impacted by ongoing regional tensions, now in their sixth month.

For the week ending August 21, U.S. federal data show imports from Saudi Arabia were around 196,000 barrels per day (bpd), a 55.1% decline from year-ago levels. Iraq delivered no barrels at all during the reporting week, while Venezuelan crude oil imports averaged 662,000 bpd, a 791% increase over the same period last year.

Sources familiar with the matter told Reuters the deal would ensure U.S. companies "lock in" rights to more than a dozen oilfields, including new developments inside the Orinoco Belt.

"A separate source said a 'lease' was in consideration as the legal model to make the deal work, with a further auction or tender to allocate each one of the fields among U.S. producers," the report read.

Right now, Chevron dominates the landscape for U.S. companies operating in Venezuela given its long-standing relationship with PDVSA. In April, Petropiar S.A., a Venezuelan joint venture in which Chevron holds a 30% stake, secured rights to develop parts of the Orinoco Belt.

Reuters added that oil reforms in Venezuela in the post-Maduro landscape allow for work through joint ventures and production-sharing contracts. The report added that, given the lack of concrete details on the bilateral arrangements, it could raise serious legal and constitutional questions.

A separate report from Axios added that U.S. Energy Secretary Chris Wright was headed to Venezuela, possibly in early September.

It's a Long Way to Normal

Recovery, however, could prove difficult. By June, parts of the country were in ruins following twin earthquakes near the coastal state of La Guaira, closing the country's international airport indefinitely.

Early this year, delegates from ConocoPhillips examined the emerging opportunities in Venezuela, though Chief Executive Officer Ryan Lance said that reforms so far were "woefully inadequate." Others have said the country is "uninvestible."

That said, improvements are noticeable. Secondary sources reporting to economists at the Organization of the Petroleum Exporting Countries (OPEC), of which Venezuela is a founding member, put the nation's production at around 1.1 million bpd for July, compared with a full-year 2025 average of 950,000 bpd.

That means the United States is importing more than half of what Venezuela is producing. Meanwhile, a separate report from the Bloomberg news service suggested that Venezuela may leave OPEC, citing conversations with U.S. officials.

By the Numbers

• 791% year-on-year increase in U.S. imports of Venezuelan oil
• 100% decline in year-on-year U.S. imports of Iraqi crude oil

The United Arab Emirates already charted its path to the exit doors, and further exits would deal a blow to OPEC's efforts to adjust to global market dynamics. For Venezuela, it might not matter in the short term because of the broad-based investments and commitments needed for full-scale reconstruction for years of sanctions and mismanagement.

Long term, however, may be different, assuming production gains continue.

"OPEC is fighting what is starting to look like a losing battle against significant changes in the geopolitics of oil," Henning Gloystein, managing director for energy and resources at Eurasia Group, told Bloomberg.

Key Takeaways

• To the victor goes the spoils, but it may be starting to raise eyebrows.
• The Venezuelan energy sector is rebounding, but there's a long road to stability

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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 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).