The Venezuelan oil industry Trump is planning to revive

The headquarters of Venezuela’s state-run oil company, Petróleos de Venezuela, or PDVSA, in Caracas, Venezuela, Feb. 6, 2019. There was little immediate clarity on Saturday, Jan. 3, 2026, as to how the White House envisions the United States profiting from Venezuela’s oil. (Meridith Kohut/The New York Times)

By STANLEY REED

Venezuela’s oil industry would “make a lot of money” with the United States behind it, President Donald Trump said Saturday in a news conference to confirm the capture of the country’s president, Nicolás Maduro, who is facing federal drugs and weapons charges.

“We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said.

He said the Venezuelan oil industry had been “a total bust,” for a long time, adding, “They were pumping almost nothing by comparison to what they could have been pumping.”

Trump appears to be counting heavily on U.S. intervention in the oil industry to help transform Venezuela, a proposition that could prove to be complicated and expensive.

How much oil does Venezuela produce?

Venezuela claims to have more than 300 billion barrels in the ground, the largest reserves of oil of any country. But it struggles to produce about 1 million barrels a day, or around 1% of global production.

In addition, much of Venezuela’s oil is extra heavy, making it polluting and expensive to process.

What is the state of the oil industry in Venezuela?

The industry has seen some recovery in recent years, but output is well below the more than 2 million barrels a day that Venezuela was producing in the early 2010s.

The national oil company, known as PDVSA, lacks the capital and expertise to increase production. The country’s oil fields are run down and suffer from “years of insufficient drilling, dilapidated infrastructure, frequent power cuts and equipment theft,” according to a recent study by Energy Aspects, a research firm. The United States has placed sanctions on Venezuelan oil, which is now exported primarily to China.

Are any Western oil companies involved there?

Chevron is the main Western oil company still operating in the country and produces about a quarter of Venezuela’s oil. Early in this century, when other companies were forced out, Chevron stayed, figuring that conditions might eventually improve.

Roughly half of Chevron’s production is exported to the United States.

On Saturday, Chevron said it was trying to ensure the safety of its employees and its operations in the country after Maduro and his wife, Cilia Flores, were arrested and removed in the U.S. military action.

The oil giant, based in Houston, has conducted operations in Venezuela since 1923 and has maintained five onshore and offshore production projects there.

“With more than a century in Venezuela, we support a peaceful, lawful transition that promotes stability and economic recovery,” said Kevin Slagle, a Chevron spokesperson. “We’re prepared to work constructively with the U.S. government during this period, leveraging our experience and presence to strengthen U.S. energy security.”

Later Saturday, Chevron said it had given an incorrect statement and issued a new one that removed mention of the U.S. government, saying: “We continue to operate in full compliance with all relevant laws and regulations.”

What would U.S. control of the country’s oil production mean?

In theory, if U.S. oil companies were given greater access in Venezuela, they could help gradually turn the industry around. “But it’s not going to be a straightforward proposition,” said Richard Bronze, head of geopolitics at Energy Aspects.

Analysts say increasing Venezuelan production will not be cheap. Energy Aspects estimated that adding another half a million barrels a day of production would cost $10 billion and take about two years.

Major increases might require “tens of billions of dollars over multiple years,” the firm said.

The overthrow of the Venezuelan government may offer opportunities for American oil companies, but they could also find themselves dragged into a messy situation, industry analysts say.

Pressure from Trump could “force them to play a quasi-governmental role on the capacity building and development front,” Helima Croft, head of commodities at the investment bank RBC Capital Markets, wrote Saturday in an investment note.

She added that reducing military influence over the oil industry and the broader economy “could prove challenging.”

How will this affect oil prices?

Trump’s intervention in Venezuela is bound to send jitters through the oil markets, but analysts say that a major price jump is unlikely.

Venezuela is a relatively small producer and many analysts calculate that the oil market is currently oversupplied. Brent crude, the international benchmark, traded at $60.80 a barrel on Friday, near its lows for the year.

After Washington conducted its operation to remove Maduro, Third Bridge, a research firm, said in a note that it “did not see these events immediately impacting the price of crude oil or the cost of gasoline drivers see at the pump.”