The recently announced U.S.-Venezuela oil deal is a “major opportunity”, but the latter’s oil sector has “a long road to recovery”.
That’s what Rystad Energy outlined in a market update sent to Rigzone late Monday, which highlighted that the new oil agreement between the countries covers 17 strategic developments containing around 65 billion barrels of recoverable crude. The deal spans greenfield opportunities in the Orinoco Belt and brownfield redevelopments around Lake Maracaibo, the update pointed out.
“Rystad Energy analysis indicates the deal could materially reshape Venezuela’s long-term production trajectory, but the recovery is likely to be gradual, initially brownfield-led, and subject to significant political, contractual, and execution risk,” Rystad noted in the update.
Radhika Bansal, Rystad Energy Senior Vice President, Latin America Oil And Gas, warned in the update that “the challenge facing Venezuela has always been whether the right conditions would emerge to develop the country’s resources”.
“This agreement improves those conditions, with more competitive fiscal terms and a clearer pathway for international capital,” Bansal said.
“However, investors looking at multi-decade projects need confidence that a contract signed today will be honored by whoever governs Venezuela in ten or twenty years,” the Senior Vice President added.
“The political reaction inside the country … is a signal that durability is not guaranteed.
Our base case is a gradual, brownfield-led recovery in the near term, with Orinoco greenfield production only becoming meaningful from around 2035,” Bansal continued.
In its update, Rystad outlined that Venezuela’s production peaked at over three million barrels per day historically but had fallen to around 1.1 million barrels per day by 2025 “following years of underinvestment and deteriorating infrastructure”.
Rystad pointed out that the 17-project framework identifies nine brownfield redevelopments and eight Orinoco greenfields. The company said it expects the first incremental barrels to come from the brownfield assets, “where existing wells and facilities provide a faster route back to production”.
“In our scenario, brownfield output rises from around 157,000 barrels per day in 2027 to 680,000 barrels per day by 2030, reaching around 740,000 barrels per day in the early-to-mid 2030s,” Rystad noted.
“The pace will depend on how quickly operational bottlenecks are resolved, including the return of rigs and oilfield services, well workovers, infrastructure rehabilitation, and diluent supply for extra-heavy Orinoco crude,” it added.
Rystad revealed in its statement that it assumes “meaningful greenfield Orinoco production” only from around 2035, “with output reaching roughly 840,000 barrels per day by 2040 and approaching two million barrels per day by 2050”.
“In the combined scenario, total Venezuelan output reaches 2.3 million barrels per day by 2035 and just above three million barrels per day by 2050,” Rystad noted.
The company said the associated investment is similarly backloaded.
“Around $21 billion during 2027-2035, followed by around $64 billion in the 2036-2040 window,” it pointed out.
Rystad outlined that proposed fiscal changes for the Orinoco greenfields, including minimum royalties of 16 percent and a corporate tax rate of 34 percent, lower project breakevens by seven to 13 percent in Rystad’s modelling. The company described this as “a meaningful improvement that does not by itself make Venezuela competitive against other global upstream opportunities on cost and execution terms”.
In its update, Rystad went on to point out that the U.S.-Venezuela agreement has drawn criticism from across Venezuela’s political spectrum.
“A future government with a new electoral mandate could face pressure to renegotiate fiscal terms or revisit development rights, creating contractual risk for companies evaluating long-cycle investment decisions,” the company pointed out.
Rystad also highlighted in its update that OPEC quotas are unlikely to constrain an initial recovery in Venezuelan crude production. It did note, however, that if production does rebuild substantially, Venezuela outside OPEC would represent a significant source of future supply beyond the group’s ability to manage.
“The deal also directly displaces China, previously Venezuela’s largest crude buyer and a major creditor, representing a significant strategic reorientation with implications beyond the oil sector,” Rystad highlighted.
In a blog posted on GasBuddy’s website on Monday, Patrick De Haan, head of petroleum analysis at the company noted that the Trump administration had “struck a major deal with Venezuela”, which he described as “a signal that the White House remains concerned about elevated fuel prices”.
He added, however, that “any benefits from increased Venezuelan output will take years to fully materialize and are unlikely to move the needle in the near term”.
‘Biggest Oil Deal in World History’
In a statement posted on his Truth Social page late Friday, U.S. President Donald Trump announced that the U.S. had “just entered into an Agreement with the Country of Venezuela on … THE BIGGEST OIL DEAL IN WORLD HISTORY!”.
“At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured majority U.S. control of more than 65 BILLION