With U.S. President Donald Trump publicly outlining a vision in which American oil companies could invest billions of dollars to revive Venezuela’s oil sector, global attention has once again turned to one of the world’s most resource-rich yet operationally constrained petroleum producers. For now, however, much remains unresolved. Sanctions policy, domestic governance, the hydrocarbons legal framework, and the future role of the national oil company PDVSA are all subject to uncertainty. Any serious assessment of reopening Venezuela’s oil industry must therefore begin with realism rather than ambition. The geological potential is undeniable, but translating it into sustained production growth would require clarity, stability, and long-term commitment.
Venezuela currently produces around 1.1 million barrels per day, well below historical levels. Output has recovered modestly from a low of roughly 580,000 bpd in 2020, largely due to workovers, reactivation of shut-in wells, and targeted low-cost interventions. While this rebound has been notable, it masks deeper structural challenges. Infrastructure degradation, underinvestment, constrained access to technology, and limited external financing continue to weigh heavily on the sector.
Looking Back: Venezuela’s Production in the 1970s–1990s
Venezuela’s modern oil history reflects both extraordinary resource wealth and shifting political and institutional frameworks. Crude production peaked at approximately 3.5 million bpd in 1970, positioning the country among the world’s largest oil exporters. The oil shock of 1973 triggered a sharp decline in output and accelerated nationalization, culminating in the creation of PDVSA in 1976 under President Carlos Andrés Pérez.
The early decades of PDVSA were marked by strong technical performance and productive partnerships with international oil companies. During the 1980s and 1990s, foreign capital and expertise were instrumental in restoring production to just over 3 million bpd by the late 1990s. At that time, Venezuela’s crude slate was more balanced, with heavy oil accounting for roughly 30–40% of output, compared with nearly 70% today.
Investment efficiency during that period was notable. In real 2025 dollar terms, cumulative upstream spending of roughly $81 billion between 1980 and 1999, equivalent to about $4 billion per year, was sufficient to lift production from 1.5 million bpd to more than 3 million bpd. While those economics are no longer replicable, the period underscores the scale of reinvestment once required to sustain high output levels.
The Investment Required to Return to 3 Million Barrels Per Day
Industry analysis suggests that returning Venezuelan production to 3 million bpd is technically feasible but capital intensive and highly time dependent. Maintaining current production levels alone would require approximately $53 billion in upstream and infrastructure investment over the next 15 years. Without this spending, output is expected to decline steadily toward roughly 700,000 bpd by 2040.
In the near term, incremental gains are possible. Between 300,000 and 350,000 bpd could be restored within two to three years through workovers, infrastructure repairs, and selective short-cycle projects, with an estimated capital requirement of around $14 billion. This would lift production toward 1.4 million bpd, but moving beyond that level would require a materially different investment profile.
From the mid-2020s onward, sustained annual investment of approximately $8–9 billion, in addition to maintenance capital, would be required to drive growth. Under an optimistic but technically grounded scenario, production could reach 2 million bpd by the early 2030s and potentially recover to 3 million bpd by around 2040. Achieving that outcome would require total oil and gas investment of roughly $183 billion over a 15-year period, including both upstream development and extensive spending on pipelines, upgraders, and other surface infrastructure.
Critically, a significant portion of this capital, estimated at $30–35 billion, would need to be committed in the first two to three years of the investment cycle. This level of early funding would almost certainly need to come from international sources, as domestic financing capacity alone would be insufficient.
Timing and Market Realities
Time is a central constraint. Even in a scenario where sanctions are lifted and reforms are enacted swiftly, Venezuela would not re-emerge as a major swing producer in the near term. Many of the projects required to lift output beyond 2 million bpd involve long lead times and, under current cost structures, require oil prices above $80 per barrel to be economically viable.
As a result, a more realistic medium-term ceiling for Venezuelan production may lie in the 2–2.5 million bpd range, with a return to 3 million bpd more likely toward the latter half of the 2030s. The opportunity to reach that level, however, depends on decisions made much earlier in the cycle, particularly regarding legal reform, investment conditions, and infrastructure rehabilitation.
What Western Oil Companies Would Need to Return
For Western oil companies, the primary barriers to re-entry are institutional rather than geological. Large-scale investment is unlikely without fundamental changes to Venezuela’s fiscal and legal framework. Competitive fiscal terms, modern contractual structures, and credible mechanisms for dispute resolution are minimum requirements.
More fundamentally, meaningful international participation would likely require constitutional and legal changes that allow foreign companies to hold majority ownership in oil and gas assets. As long as this constraint remains in place, investor appetite is expected to be limited. Chevron’s continued presence as a minority partner is widely viewed as an exception rather than a scalable model.
Beyond formal reforms, companies would also seek clarity on contract sanctity, the restructuring of PDVSA into a commercially oriented partner, and the resolution of outstanding arbitration claims. Without progress on these fronts, Venezuela’s vast resource base is likely to remain underdeveloped despite improving market fundamentals.
A Measured Conclusion
The potential reopening of Venezuela’s oil industry represents one of the most consequential long-term scenarios in global energy markets. The upside is substantial, but so too are the costs, risks, and timelines involved. A return to 3 million barrels per day is technically achievable, but only through sustained international investment, deep institutional reform, and a long-term policy horizon that extends beyond electoral cycles. The pathway exists. Whether the conditions can be created to follow it remains the defining question.
