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The removal of Nicolás Maduro in January marked “an important opening in the way oil business is conducted” for the Venezuelan oil sector, according to Maria Angela Capello, president at Red Tree Consulting. Venezuela’s vast oil resources make talk of an “opening” hugely attractive to US investors, but legal uncertainty threatens to keep extraction theoretical.
Capello spoke alongside Ted Borrego, energy law professor at the University of Houston Law Centre, at the Offshore Technology Conference 2026. The pair spoke as part of an executive dialogue titled ‘How US energy companies are sizing up Venezuela’s revival’. The two concurred on the value of the opportunity but differed on the ease with which it could be realised.
For Capello, the reform to the Organic Hydrocarbon Law, made on 29 January, represents a “major breakthrough”. The new amendment overturned the requirement that the state must hold a majority stake in all joint ventures, allowing private parties to engage in upstream exploration, production and transportation, thus opening the door to Venezuela's massive oil reserves.
Venezuela is thought to have 303 billion barrels (bbbl) of oil, making it home to the world's largest proven oil reserves. These reserves represent at least 17% of global crude reserves, with the majority consisting of extra-heavy crude in the Orinoco Belt.
The opportunity is significant, and Capello described Venezuela as “the giant brownfield, and the frontier in the oil and gas industry today”. According to her assessment, Venezuela’s future is not only bright, but blinding – there will be “no comparison in terms of activity, growth, appeal”.
Yet Borrego caveated her optimism. He pointed out that, although the law marks a significant change, it is yet untested, and newness equates to uncertainty. “Nobody has done a deal with the new hydrocarbons law yet, so we don't know how it is going to operate for the people that are trying to go into [Venezuela].”
He added that even local Venezuelan experts lack the present expertise. “Today, a local lawyer is as lost as I am. He doesn’t know what is going on.”
This depth of legal uncertainty seeps into the risk profiles of potential investors. Alone, new legal frameworks can be navigated, but political uncertainty in Venezuela is exacerbating nerves. Following Maduro’s removal, US President Donald Trump announced the US would “run” Venezuela, but it is Maduro loyalist Delcy Rodriguez who is currently the political head of the country, apparently with US backing.
How that will translate long-term is currently uncertain; despite calls for free and fair democratic elections, specific commitments on when and how these might take place have, as yet, been avoided.
Investor concerns are not only around uncertainty in Venezuelan politics either. Although Trump’s policies can usually be relied upon to favour US investment in oil extraction, a history of US sanctions on Venezuela's energy sector do little to calm investor nerves. Even with support under the present administration, US operators looking to develop long-term business strategies in Venezuela must navigate a US political system prone to rapid change.
For upstream investors, that risk-reward ratio risks tipping towards conservatism. Borrego argued that legal stability was the only realistic antidote: “You want the general legal framework to be in place, and to know that it is going to stay in place for a long time.”
Capello saw more immediate promise in the Venezuelan oil space than Borrego and noted that “there are opportunities in the short-term that we are already looking at”. However, she concurred on the benefit of legal stability. “To really push investments into the Venezuelan oil industry […] you need to organise the legal and financial elements, to enable confidence in the system,” she said.
"Legal uncertainty casts shadow over Venezuelan oil opportunity " was originally created and published by Offshore Technology, a GlobalData owned brand.
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