Venezuela’s oil will cost US oil firms billions of investment before earning dollar one

US President Donald Trump says that the US will take over running Venezuela and get the oil sector back on its feet so everyone can “make lots of money.” But the problems and underinvestment in the vast oil reserves and the sour nature of that oil means that incoming US firms will have to invest billions of dollars over a decade before they can gross dollar one.

Venezuela holds the world’s largest proven oil reserves, estimated at more than 303bn barrels, concentrated primarily in the Orinoco Belt — a vast, tar-like deposit in the centre of the country. But despite this immense resource, years of mismanagement, underinvestment and international sanctions have left the country’s oil industry in a state of near-collapse.

Once one of the world’s top oil exporters, Venezuela produced more than 3mn barrels per day in the late 1990s. Today, output hovers just above 800,000 barrels per day, according to OPEC figures, a steep decline that reflects decades of neglect and corruption. Exports have fallen in tandem, with most crude now sent to a dwindling group of politically aligned countries, including Cuba and China.

The heavy, sour crude of the Orinoco Belt - which is high in sulphur and toxic metals - is a major headache to refine. Venezuela’s domestic refining network, previously capable of processing 1.3mn barrels per day, has been operating far below capacity for years. Facilities such as the Amuay and Cardón refineries, once considered among the largest in Latin America, suffer frequent breakdowns and shortages of spare parts and skilled labour.

The government has allocated budget money to repair and modernise the refineries, but much of it was stolen by officials and used instead to fund a luxury lifestyle.

Much of the remaining crude is shipped to Cuba for processing, with refined products then re-exported to China under oil-for-debt arrangement.

If the US oil majors take over then there are refineries in the US, particularly in the Gulf Coast, that were once key buyers of Venezuela’s heavy crude, but sanctions have severed most of those commercial ties since 2019 apart from the oil that Chevron imports.

State-owned oil company Petróleos de Venezuela S.A. (PDVSA) controls the country’s oil industry. However, under the leadership of former President Hugo Chávez and his successor Nicolás Maduro, the latter of whom is now awaiting trial in New York, the company has been drained by corruption. According to official and investigative reports, billions of dollars earmarked for infrastructure and maintenance have been siphoned off through embezzlement and illicit contracts.

In 2023, a wave of arrests involving senior PDVSA officials revealed a $3bn corruption scandal linked to unaccounted oil shipments and missing payments.

US sanctions, particularly those imposed under the Trump administration in 2019, have further isolated Venezuela’s oil sector from global markets. Washington banned US companies from trading Venezuelan crude and targeted vessels and intermediaries involved in circumventing the restrictions. Although some licences were temporarily granted in late 2023, such as with Chevron, these remain limited and subject to political developments.

Despite this, Trump is claiming since Operation Maduro on January 3 that American companies would return to Venezuela to develop the Orinoco Belt. In reality, foreign investment remains scarce, and with the ousting of Maduro political uncertainty remains high.

The presidency has been assumed by the former vice president Delcy Rodriguez who was sworn in on January 5, but she comes from the same clique as Maduro and it is unclear if the Trump administration will not try to oust her too. Trump threatened Venezuela with a second military strike if he doesn’t like what is going on there. Under those conditions it is unlikely that the oil majors will commit to multi-billion multi-year investments into modernising Venezuela’s oil sector.

As of early 2026, most major US oil firms have long since exited or suspended operations in Venezuela due to the long standing political risks. However, some companies had long histories in the country and maintained dormant joint ventures or contingent interests pending changes in US policy.

Chevron is the last standing and only major US oil company still operating in the country. It retained a sanctioned waiver from the Biden administration to continue its operations that began in the 1920s. The company currently holds stakes in several joint ventures with PDVSA, including Petroboscán and Petropiar, which are located in the Orinoco Belt and western Zulia state.

As of 2025, Chevron’s operations remained modest, constrained by infrastructure decay and bureaucratic hurdles, but the company reportedly exported around 130,000 barrels per day under the Office of Foreign Assets Control (OFAC) licence.

Russia’s state-owned Rosneft is another rare foreign investor also through several joint ventures, including in the Carabobo and Junín blocks. However, amid pressure from US sanctions, Rosneft transferred its assets in 2020 to a Russian state entity and the extent of ongoing operations remains unclear.

Apart from the operational and dilapidated state of the domestic refineries, the country’s infrastructure is also in tatters and would need heavy investment to transport oil to the ports for export. Venezuela’s pipes suffer from frequent leaks and breakdowns. Storage facilities, shipping infrastructure and blending units are also deteriorating, further complicating efforts to stabilise or increase production.

“The resources are there, but the system to monetise them is broken,” said a former PDVSA engineer who left the country in 2018. “It would take years — and a change in government — to even begin to fix it.”