Venezuela is once again at the center of global energy debate. After U.S. forces captured Nicolás Maduro in a dramatic night raid earlier this month, President Donald Trump began urging American oil companies to return to Venezuela and help revive its deteriorated petroleum sector. Despite Venezuela’s status as the holder of the world’s largest proven oil reserves, the response from major Western energy firms has been cautious at best.
ExxonMobil CEO Darren Woods described Venezuela as “uninvestable,” a remark that reportedly frustrated the U.S. president. While some European and American majors offered polite interest, none have committed to new investment—highlighting the deep structural challenges facing Venezuela’s oil industry.
🛢️ A Once‑Mighty Oil Power
There was a time when Venezuela stood as one of the world’s most important oil producers and a key U.S. ally in Latin America. Production peaked in 1970 at 3.75 million barrels per day, powered by massive investments from U.S. oil companies developing the country’s vast reserves—now estimated at more than 300 billion barrels.
Even the 1976 nationalization of the sector, which created state‑owned PDVSA, did little to deter foreign participation. Venezuela remained a major global supplier, and its oil industry retained strong technical capacity and international partnerships.
📉 Decline and Revival — Before the Next Collapse
Nationalization marked a turning point. Production began to slide, falling to just under 1.7 million barrels per day by 1985 as global oil prices collapsed. Yet the 1990s brought a resurgence. Caracas loosened regulations, opened the door to foreign capital, and offered lucrative production contracts. Output rebounded sharply, reaching nearly 3.5 million barrels per day in 1997.
This revival was short‑lived. Two years later, Hugo Chávez took office and launched the Bolivarian revolution, reshaping the country’s political and economic landscape. The years that followed saw mounting instability, underinvestment, and operational decline across the oil sector.
⚙️ The Challenge Ahead
Today, Venezuela’s petroleum infrastructure is heavily corroded, underfunded, and technologically outdated. Even with Washington’s backing, rebuilding the sector would require:
- Massive capital investment
- Long‑term political stability
- Regulatory clarity
- Restoration of technical capacity within PDVSA
These are conditions that international oil companies weigh carefully—and that Venezuela has struggled to provide for decades.
🔮 A Pivotal Moment, But No Guarantees
The U.S. push to reengage with Venezuela’s oil sector marks a significant geopolitical shift. Yet the lukewarm response from industry leaders underscores a broader reality: vast reserves alone are not enough to attract investment.
Venezuela has been both a symbol of oil abundance and a cautionary tale of how quickly that abundance can erode. Whether this moment becomes the start of a new chapter—or another missed opportunity—will depend on factors far beyond geology.