Venezuela ramps up oil production again: market could get 1.8 million barrels per day

Venezuela's oil industry is once again attracting major international companies and capital. According to a new forecast by Rystad Energy, oil production in the country could grow to about 1.6 million barrels per day by 2028 and to 1.8 million by 2030.

But this is not an automatic scenario. For such growth, Venezuela will have to sharply increase the number of working drilling rigs, restore old fields and infrastructure, ensure supplies of diluents for heavy oil and achieve actual receipt of promised investments.

Signals are already there: Chevron has announced an investment program of over $7 billion over five years, Eni has obtained operatorship of the major Junin 5 project, and Repsol, Shell and several new players are expanding their presence.

Why Venezuela is interesting to oil companies again

Venezuela's problem has never been a lack of oil. The country has one of the world's largest resource bases, but decades of underinvestment, complex infrastructure and limited access for international companies have sharply reduced production compared to historical peaks.

Now the situation is gradually changing. Rystad Energy notes that the widest range of international operators in many years is working and considering expansion in the Venezuelan upstream sector.

Chevron has added Carabobo-1 and Carabobo-2-Sur-A assets to its portfolio and announced investments of over $7 billion over the next five years.

Italian Eni has obtained exclusive operatorship of Junin 5 under a new 25-year production participation contract. Repsol has regained operational control of Petroquiriquire, and Shell has re-entered the Carito and Pirital projects.

At the same time, smaller players are emerging, including GeoPark, Hunt Oil and Fluxus Oil, Gas & Energy. North American Blue Energy Partners has expanded its activities to 17 producing and prospective areas.

Additional barrels can be obtained fastest from old fields

Until the end of the decade, according to Rystad, the main growth should come not from building giant new projects, but from restoring already known fields.

Companies can bring idle wells back into operation, repair equipment and conduct additional drilling where oil has already been produced.

These are so-called brownfield projects—development of existing assets. They usually allow additional oil to be obtained faster than projects that need to be built almost from scratch.

Among potential sources of growth, Rystad names NABEP assets around Lake Maracaibo, Chevron's Petropiar and Petroboscan projects, the Eni Corocoro field and the GeoPark Bare block.

The result is already visible on individual assets. According to analysts, combined production at former Petrozamora-related fields around Lake Maracaibo has grown from about 90 thousand barrels per day at the end of 2024 to almost 200 thousand now.

The main obstacle is only a few working rigs

It is here that it becomes clear how difficult the path to 1.8 million barrels per day remains.

According to Baker Hughes data cited by Rystad Energy, in August Venezuela had only two active drilling rigs.

Venezuela's Ministry of Hydrocarbons sets a much more ambitious goal of about 93 rigs by 2028.

Rystad believes that to implement its own scenario, the country will need about 50 working rigs by 2028 and almost 80 by 2030.

The gap is huge.

SLB has about 15 rigs in Venezuela that could potentially be brought back into operation within about a year. But for a larger-scale recovery, it will be necessary to repair old equipment, import new rigs and bring back oilfield service companies.

Heavy oil complicates recovery

Another feature of Venezuela is the quality of its crude.

About three-quarters of the country's production until 2028, according to Rystad's forecast, will be heavy, extra-heavy oil and bitumen. Approximately 60% of production should come from the Orinoco oil belt.

Such crude is harder to produce and transport. It often needs to be blended with lighter hydrocarbons—diluents—to reduce viscosity.

Therefore, for rapid growth, it is not enough to simply drill more wells. Stable supplies of diluents, repair of pipelines and equipment, electricity and restoration of the entire oilfield service chain will be required.

Why the 1.8 million barrels forecast cannot yet be considered guaranteed

Rystad directly ties its forecast to several conditions: investments must actually be made, drilling rigs must return to work, and the service industry and infrastructure must scale up in time.

Analysts also warn against mixing real investment commitments with large long-term plans.

For example, the $100 billion figure associated with North American Blue Energy Partners, according to Rystad, reflects long-term financing needs, not capital already guaranteed to be invested in the near future.

Therefore, projects linked to specific existing assets and operators that already have infrastructure and experience in the country look most convincing.

What could happen after 2030

If restoration of existing fields is successful, larger new projects could join the growth in the next decade.

Rystad names among them Chevron's Ayacucho 8, Eni's Junin 5 and NABEP's new blocks in the Orinoco oil belt.

In the company's optimistic scenario, Venezuelan production could approach 2.58 million barrels per day by 2035.

Even that level would remain below the country's historical peaks of over 3 million barrels per day, but would significantly strengthen Venezuela's role in the global oil market.

There is enough oil—now the question is investment and equipment

Venezuela's recovery story is unusual because the country does not need to first look for a new resource base. The main reserves are already known.

The main task is to restore the ability to produce them in much larger volumes.

Therefore, the next few years will be a test not of geology, but of economics and execution: whether Chevron and other international companies really invest the planned billions, whether the drilling fleet can be expanded quickly, and whether the service infrastructure can withstand scaling.

If these conditions are met, Rystad Energy's forecast of 1.8 million barrels per day by 2030 looks achievable. If restoration of drilling and infrastructure drags on, Venezuelan oil's return to the market will happen much more slowly.

Source: Rystad Energy.