Venezuela is moving to formalize oil-sector reforms that would expand partnership-style contracts and loosen PDVSA’s control over new investment, according to comments from the country’s top lawmaker on Tuesday.
On Tuesday, National Assembly president Jorge Rodríguez said reforms to Venezuela’s hydrocarbons law, expected to be debated this week, would be built around partnership structures first introduced under Nicolás Maduro. While details remain scarce, the direction is clear: Caracas wants to formalize the so-called “productive participation contracts” that have quietly replaced the country’s rigid, PDVSA-controlled joint venture model in recent years.
Venezuela is emerging from political upheaval with oil output stuck below 1 million barrels per day, a fraction of the roughly 3 million bpd it pumped in 2008. Yet the country still holds the world’s largest proven crude reserves, most of them in the Orinoco Belt. The problem has never been geology. It has been sanctions, diluent shortages, broken infrastructure, corruption, mismanagement, and a hollowed-out state oil company.
Washington now appears intent on rewiring that system rather than merely easing sanctions. The Trump administration has pushed a U.S.-directed revival plan that combines tight supervision of oil sales, legal pathways for global traders, and a reset of Venezuela’s investment rules. Vitol and Trafigura are already marketing Venezuelan crude under special U.S. licenses, offering Merey heavy crude to Chinese refiners at discounts far narrower than those seen during the sanctions-era shadow trade. Venezuelan exports to China have plunged in the short term, but the shift toward legal, transparent sales has begun.
International oil companies are standing by. Chevron is still producing roughly 240,000 bpd through its joint ventures in Venezuela. The US major has said it could boost Venezuelan output by about 50% within two years using existing infrastructure. Repsol has a positive outlook as well. ENI continues to operate key gas assets. Trump has gathered other major industry players to discuss possible Venezuelan developments as well.
Some analysts see a realistic path back for Venezuela’s oil industry, saying that 2 million bpd by the early 2030s is possible if reforms hold and capital returns.
By Julianne Geiger for Oilprice.com
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