API: Restoring Venezuela's Oil Industry Will Take Years and Require Billions in Investment

Industry Leaders Caution on Venezuela’s Oil Sector Revival

Mike Sommers, head of the American Petroleum Institute (API), together with executives such as Patrick Pouyanne of TotalEnergies (NYSE:TTE), have stressed that bringing Venezuela’s oil industry back to life will be a lengthy and expensive endeavor. They highlight the necessity for robust legal protections, secure investment conditions, and substantial upgrades to infrastructure, all while facing political demands for swift results.

Although modest production gains—ranging from 100,000 to 200,000 barrels per day—could be realized in the near term, particularly in regions like Lake Maracaibo where Chevron (NYSE:CVX) is active, industry leaders agree that a significant resurgence will demand extensive, long-term financial commitments.

Before major investments can be made, companies are seeking assurances such as reliable legal frameworks, safeguards against expropriation, and transparent commercial agreements. Former President Trump has encouraged American oil giants to invest as much as $100 billion to unlock Venezuela’s vast oil reserves, viewing this as a strategy to help reduce global energy costs.

According to Rystad Energy, a Norwegian energy consultancy, restoring Venezuela’s oil output to its former peak of 3 million barrels per day would require a staggering $183 billion over a 15-year period. This immense sum is needed to address the severe deterioration of the country’s oil infrastructure, which has suffered from years of neglect, lack of funding, and international sanctions. Rystad anticipates a slow and gradual recovery, with a full return to peak production only possible if long-term stability and investment security are achieved.

Darren Woods, CEO of ExxonMobil, recently described Venezuela as “uninvestable” due to significant legal, commercial, and political uncertainties, despite calls from President Trump to rebuild the nation’s oil sector following the departure of the Maduro administration. Other major players, including ConocoPhillips (NYSE:COP) and Chevron, share these concerns, pointing to challenges such as asset confiscations, unclear regulations, corruption, and ongoing political turmoil as major deterrents to investing billions of dollars.

Both ExxonMobil and ConocoPhillips suffered multi-billion dollar losses in Venezuela after former President Hugo Chávez’s 2007 nationalization campaign, which forced foreign oil firms to relinquish majority stakes in lucrative Orinoco Belt projects to the state oil company, PDVSA. When these companies refused to accept minority positions and renegotiated terms, Venezuela seized their assets, prompting their exit and leading to prolonged, unresolved international arbitration cases seeking compensation.