Major Oil Companies Near First Venezuela Deals Since Maduro’s Capture

Energy giants Chevron and Shell are reportedly finalizing significant oil production agreements with Venezuela following recent political changes. These would mark the first major petroleum deals since President Nicolas Maduro's capture by U.S. forces in January.

Two major international energy corporations, Chevron and Shell, are reportedly on the verge of finalizing substantial oil production agreements with Venezuela, marking the first significant petroleum contracts since U.S. forces captured President Nicolas Maduro in January, according to five sources familiar with the negotiations.

These agreements would enable both energy companies to increase production in highly sought-after oil regions within the South American nation, representing the most significant progress toward what U.S. President Donald Trump has described as a $100 billion initiative to reconstruct Venezuela’s petroleum industry following years of poor management and insufficient investment under both Maduro and former leader Hugo Chavez.

In late January, Venezuela’s National Assembly passed comprehensive changes to the nation’s primary oil legislation. The updated law provides foreign corporations with independence to operate, export, and market Venezuelan petroleum even when serving as minority partners alongside state-owned oil company PDVSA.

Sources indicate that Chevron and Venezuelan energy officials have reached preliminary agreement on terms to expand Chevron’s most significant oil operation, Petropiar, located in the extensive Orinoco Belt region.

Neither Venezuela’s oil ministry, PDVSA, nor Chevron responded to requests for comment.

The agreement would grant Chevron production rights in the Ayacucho 8 region, situated south of the existing Petropiar operation area, sources revealed. This substantial block contains confirmed oil reserves and would enable Chevron to significantly increase its extra-heavy oil production and exports.

According to sources, Chevron seeks to obtain reduced royalty rates for the new territory along with additional tax and trade benefits available to companies under recent legislation designed to develop new oil and gas regions. While PDVSA finished exploration and assessment work in Ayacucho approximately twenty years ago, the area remains mostly undeveloped.

Sources added that Chevron and PDVSA could expand their existing well-cluster production infrastructure from Petropiar into Ayacucho 8, enabling relatively rapid output increases. This project would become Chevron’s fifth oil region in Venezuela.

The development could establish Chevron as the largest private producer in the Orinoco region, which contains more than three-quarters of the country’s total crude reserves. Previously, rival American company ConocoPhillips held the position of top foreign producer in that area before departing Venezuela twenty years ago during widespread nationalizations.

According to a PDVSA document reviewed by Reuters, Chevron and PDVSA produced approximately 90,000 barrels per day of upgraded Hamaca crude and 20,000 barrels per day of vacuum gasoil at Petropiar last month. Venezuela’s overall production stands at roughly 1.05 million barrels per day.

Shell finalized preliminary oil and gas agreements with Venezuela last week during U.S. Interior Secretary Doug Burgum’s visit to Caracas. Venezuelan officials did not publicly release specifics about these deals or identify the included fields.

Reuters obtained an official summary document revealing that Shell plans to develop the Carito and Pirital fields in the highly desirable Monagas North region in eastern Venezuela. These locations are among the limited areas in the country capable of producing light and medium crude oil plus natural gas, which oil companies value for blending to facilitate exports of Venezuela’s heavy oil.

Shell confirmed via email that it signed multiple agreements with the government, engineering firms Vepica and KBR, and oil-service company Baker Hughes. These agreements “formally articulate Shell’s intent to progress a variety of opportunities with Venezuela,” including offshore gas, onshore oil and gas, exploration, local content and workforce development. The company declined to provide field details or additional information to Reuters.

Monagas North aligns with Shell’s broader natural gas strategy due to its proximity to the country’s onshore gas infrastructure and areas with the highest gas flaring in Venezuela. Shell, M&P, and other companies have previously developed plans to reduce gas flaring by constructing necessary infrastructure to capture, process, and transport gas for export, potentially through Trinidad.

The Punta de Mata area, encompassing Pirital, Carito, and the nearby El Furrial field, generated approximately 94,000 barrels per day of crude and about 1.03 billion cubic feet per day of gas last month, according to independent data. Of that gas production, roughly 350 million cubic feet per day was flared.

Prior to this preliminary agreement, Shell’s sole Venezuelan project was the flagship Dragon offshore development near Trinidad. The company faced challenges advancing this project after the U.S. imposed sanctions on Venezuela’s energy sector in 2019. Shell had previously sold its interest in the flagship Urdaneta Oeste oilfield to French company Maurel & Prom in 2018.

PDVSA and the oil ministry are conducting discussions with approximately twelve joint venture partners interested in expanding operations to adjacent fields, established areas, or blocks designated as greenfields requiring infrastructure development.

Other companies seeking to expand their project areas to increase oil and gas production include Spain’s Repsol and M&P, sources reported. Repsol represents the foreign partner with the largest outstanding debt in Venezuela, totaling over $5 billion accumulated during sanctions, the company stated last month.

Chevron and Venezuela’s government are also negotiating the U.S. company’s return of two undeveloped offshore natural gas areas to Venezuela at the Plataforma Deltana project on the maritime boundary with Trinidad and Tobago, which could be reopened for private investment.

The terms for Chevron to relinquish those stakes remain unclear. Chevron prioritizes oil rather than gas production in Venezuela.

Venezuela initiated a comprehensive review of all oil and gas projects in February, beginning with production sharing contracts signed by Maduro’s administration with lesser-known companies, and recently extending to joint ventures with larger partners. The government is requesting project documentation from participating companies, sources indicated.

PDVSA has assumed control of administration and oil sales for many production sharing contracts during the review, temporarily suspending them. Oil ministry officials have informed oil executives they expect to complete the review by the end of March, sources said.

Oil ministry officials have informed oil executives that inactive projects or those failing to meet investment targets could face contract revocation under the review.

The U.S. government is also thoroughly examining company credentials and sanctions compliance before approving any existing or new partners, separate sources reported.