Venezuela opens 916 oil blocks to reverse output slide

Venezuela's oil minister told investors in Houston the country is ready to sign production-sharing contracts across 916 exploration areas, as Caracas seeks private capital to reverse two decades of output decline from the world's largest crude reserves.

"We need these agreements to enter these new areas," Paula Henao, Venezuela's oil minister, said at the conference Wednesday. "There is a whole world waiting for you to discover."

About 140 companies attended the Houston event, Henao said. Venezuela has already signed agreements this week with oilfield services giant SLB Ltd. and independent producer Hunt Oil Co., and a signing ceremony involving several smaller US producers and state-run Petróleos de Venezuela was set for Tuesday evening in Houston, according to three people familiar with the plans.

The push marks a step forward for the Trump administration's effort to boost oil output in Venezuela after the US raid that captured former leader Nicolás Maduro in January. But analysts caution that even with new investment, production gains will be incremental — David Goldwyn of Goldwyn Global Strategies estimates independent producers could add roughly 300,000 barrels a day over the next year, far short of the millions of barrels Washington and Caracas envision.

Venezuela is known for its heavy crude, but Henao said opportunities also exist in light and medium grades as well as natural gas. The country holds the world's largest proven oil reserves, yet production has fallen steadily for two decades as underinvestment, sanctions, and mismanagement took their toll. Output peaked near 3 million barrels a day in the late 1990s before collapsing to a fraction of that level.

Negotiations had slowed in recent months as talks bogged down over dispute resolution terms, while authorities in Caracas dealt with a devastating pair of June earthquakes that killed thousands. Interim President Delcy Rodríguez last month unveiled new regulations offering more favorable fiscal terms to international oil companies, a shift aimed at accelerating deal flow.

The White House is not formally involved in the Houston signings, but the deals follow memorandums of understanding secured when top administration officials traveled to Caracas in late April. Secretary of State Marco Rubio has also pressed Rodríguez to have PDVSA sign contracts with American companies, an industry source familiar with the negotiations said.

"There's a renewed acknowledgement from Delcy that increased oil production is the pathway to rebuilding after the earthquakes," the person said.

Incremental Gains, Not a Flood

Goldwyn said investment from independent producers and expanded output from existing fields are likely to be Venezuela's primary source of new oil growth for the next couple of years. "While the supermajors bide their time until they see how the politics sort out, and whether they can cherry pick the best assets, independents can derisk their projects in a short period of time," he said.

But those investments are only likely to add up to 300,000 barrels a day to the country's oil production over the next year, far from the increase of millions of barrels the authorities in Caracas and Washington would like to see. "Incremental production is all we will see until the framework improves, electricity is restored, and the political picture becomes clearer," Goldwyn said.

The June earthquakes further damaged infrastructure, including power grids that are critical for oil operations. For US producers, the new contracts offer access to some of the cheapest-to-develop reserves in the world, though political risk remains elevated. The deals also carry implications for global crude supply — any sustained increase in Venezuelan output would add barrels to a market already navigating OPEC+ production decisions and shifting demand forecasts.

The opening represents a significant shift in Venezuela's energy policy, which for two decades under Chávez and Maduro nationalized oil assets and expelled foreign companies. For Washington, the push serves dual purposes: increasing global oil supply and providing a revenue stream for the post-Maduro government to rebuild after the earthquakes.

This article is for informational purposes only and does not constitute investment advice.