Is the West’s 100-Year Venezuela Oil Bet About To Backfire?

Western energy companies and a U.S.-linked consortium have moved rapidly to re-establish footholds in Venezuela’s oil sector, attracted by the country’s vast reserves in the Orinoco Basin. The basin holds an estimated 303 billion barrels of crude — the largest single reserve estimate worldwide — and recent commercial steps include memoranda of understanding and field agreements with both service firms and producers. Halliburton has signed MOUs with Brazil’s Eneva and Venezuelan engineering firm WESCA to supply its digital and subsurface interpretation capabilities for field evaluation and development planning. The company positions itself to capture near-term service and capital spending as operators seek to revive dormant drilling capacity; industry data from Baker Hughes showed only two active onshore rigs at the end of July, though SLB has said it has up to 15 rigs staged in the country that could return to work within a year. Separately, TotalEnergies has reached an agreement with state oil company PDVSA. While the companies released few public details, an EU energy-sector source told OilPrice.com that the deal covers northern Monagas light crude fields such as Travi, Orocual, and Jusepin — reservoirs that supply light grades commonly used to blend heavier Venezuelan crudes. The deal follows TotalEnergies’ earlier exit from the Petrocedeno joint venture in 2021 and may indicate renewed confidence among some European majors in the legal protections available under Venezuela’s current government. Alongside corporate moves, a high-profile U.S.-backed transaction dramatically reshaped external control over Venezuelan reserves. On 2 September, U.S. Energy Secretary Chris Wright signed an agreement that gives North American Blue Energy Partners (NABEP) rights to roughly 65 billion barrels across 17 fields on a 100-year concession. The deal, described by U.S. political leaders as historic, makes NABEP one of the world’s largest private holders of oil reserves and includes a reported 35% equity stake held by the U.S. Department of War. U.S. policy documents accompanying the deal framed it as part of a wider strategy to limit influence from non-hemispheric competitors and to reassert U.S. strategic interests in the region. Legal and constitutional questions remain significant constraints. Venezuela’s constitution requires National Assembly approval for long-term concessions over strategic natural resources, a category that would include century-long deals and oil assets; critics note the recent agreements were negotiated by an interim government whose constitutional legitimacy is contested. Those legal and political uncertainties leave open whether these commercial and strategic initiatives will prompt a sustained revival of Venezuelan output or encounter roadblocks that limit their impact.