Trump Eyes Revival of US Oil Operations in Venezuela, But Challenges Loom

President Donald Trump has announced that he is counting on American businesses to revive Venezuela’s struggling oil sector following the capture of President Nicolás Maduro and his wife, Cilia Flores, by US forces. However, energy analysts caution that operating in Venezuela’s politically unstable environment may carry more risks than rewards, despite the country holding the world’s largest proven oil reserves.

Reviving Venezuela’s oil infrastructure would require billions of dollars in investment, Trump acknowledged. Additionally, the current global price of crude oil and the complex nature of refining Venezuela’s heavy, extra-viscous crude make the endeavor costly and challenging. Political instability adds yet another layer of complexity, making operations difficult even under normal circumstances.

Clayton Seigle, senior fellow at the Center for Strategic and International Studies’ Energy Security and Climate Change Program, told CNN: “This whole situation leaves more questions than answers regarding Venezuela’s political future, which will certainly weigh on corporate and industry planners considering opportunities there.”

During the US operation that captured Maduro and Flores on Saturday, both were accused of weapons violations, cocaine trafficking, and narco-terrorism conspiracy. Trump has stated that the US will “run” the country until stable leadership is installed. On the same day, Venezuelan Supreme Court named Vice President Delcy Rodriguez as interim president, while she continues to oversee operations at state-owned Petroleos de Venezuela, SA (PDVSA).

Trump emphasized that major American oil companies would play a key role in restoring Venezuela’s global oil production capacity. “We’re going to have our very large American oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” he declared.

Venezuela’s Oil Legacy and the US Connection

For over a century, foreign oil companies, especially American firms, have been active in Venezuela due to its proximity and the quality of its crude oil. US corporations historically built refinery infrastructure specifically to handle Venezuela’s heavy crude. Regulatory reforms in the early 1990s encouraged foreign investment in the sector.

That changed in 1999 when leftist leader Hugo Chávez assumed control of PDVSA, allowing the infrastructure to deteriorate. Production declined by over a third in the following 25 years, limiting the country’s oil output.

“With American talent, drive, and skill, we built Venezuela’s oil industry, and the socialist regime stole it from us,” Trump said during a press conference on Saturday.

Chevron remains the last major US oil company operating in Venezuela, exporting over 25% of the country’s oil to the US. The company has operated intermittently over the past decade under US sanctions and various waivers.

Seigle noted, “Chevron has been operating there for literally 100 years, and they have seen it all. They have stuck through thick and thin to hold a really advantageous position now.”

Michael Klare, senior visiting fellow at the Arms Control Association, added that Chevron’s experience will make it difficult for new entrants to compete. “It will take years for any new company to replicate that capability. Entering Venezuela and starting production from scratch is not a simple task. Chevron has mastered this extremely challenging and intricate procedure over decades, and few companies have access to that technology.”

In response to the US-led events on Saturday, a Chevron spokesperson confirmed that the company will “continue to operate in full compliance with all relevant laws and regulations.”