Venezuela has long struggled to revive crude oil production, the backbone of its economy, after a collapse in the 2010s predominantly driven by the imposition of US sanctions. Output fell to just 0.5mmbpd in 2020, far below the 3mmbpd seen pre-2010. Production gradually recovered YoY, reaching 0.9mmbpd in 2025 as US sanctions eased. Still, the January 2026 arrest of President Maduro by the US has prompted renewed talk of a return to the highs of the early 2000s.
Six months after the arrest, and following a period of elevated oil prices, Westwood assesses Venezuela’s onshore sector, the country’s primary source of crude oil. This review outlines the actions taken to support crude oil production recovery, identifies remaining priorities, and presents our short-medium term outlook for the sector in a country with the world’s largest proven oil reserves, estimated at 303.2 billion barrels.
Sentiment from Operators and Contractors
Following Maduro’s removal, there was significant hype about the country’s potential, with the Venezuelan government quick to put forward desires for a production rebound. On the 9th of January 2026, a meeting was held with US oil and gas executives at the White House, during which operators broadly agreed that Venezuela offers huge potential; however, investment appetite was mixed. Chevron, the only active US operator, indicated an ability to ramp up production by 50% over an 18-24-month period from the current 240kbpd. Although things are moving in the right direction, most other operators adopted a more cautious wait-and-see position given that significant roadblocks remain. Hence, ExxonMobil’s CEO labelled the country as “uninvestable” under prevailing market conditions.
Key stumbling blocks include PDVSA’s financial health, with some market sources estimating external debt at over US$150 billion. Despite a May 2026 government-led restructuring, there remains a risk of a renewed debt spiral, especially if crude prices weaken. Furthermore, the country remains politically fragile, as the installation of a new president has not led to fresh elections, with no timeline provided amid opposition pressure.
Infrastructure deterioration poses another major hurdle, requiring significant upfront investment to restore midstream and downstream infrastructure. Most of Venezuela’s crude is extra-heavy and sanctions have intensified existing supply chain constraints since 2019, including shortages of equipment, spare parts and services. Compounding this, is a loss of skilled labour, creating a significant domestic capability gap.
However, a series of sanctions relief measures has been ratified by the US government, clearing one of the primary hurdles to new investment, with the US President stating that he expects US firms to invest at least US$100 billion to restore the country’s oil sector. In Venezuela, the National Assembly approved reforms to the hydrocarbons law, allowing for more attractive fiscal terms and granting private and foreign oil companies the right to pursue potential disputes internationally, addressing a recurring investment concern for foreign companies.
While these are early steps, they have helped operators and service companies return to the country and lay out plans for their future.
Venezuela Upstream Stakeholder View on Drilling, Production and Longer-Term Outlook. Source: Company 1Q 2026 quarterly reports, earnings calls, press releases.
The Venezuelan oil ministry is reportedly hoping that crude production can reach 1.37mmbpd by the end of 2026, with a goal of returning crude production to over 2mmbpd before the end of the decade. This is extremely ambitious, with the issues over infrastructure, in-country expertise and the level of foreign investment required likely to constrain output. However, the 1.37mmbpd figure is achievable in 2027 if drilling and workover operations ramp up quickly, with growth beyond that likely to be significantly challenged, given the poor state of infrastructure and the continued cautious approach from operators.
Onshore Rig, Drilling and Production Outlook
Between 2000 and 2016, onshore well completions were strong, averaging 952 wells annually. Post-2016, the 2014 oil price crash reduced PDVSA’s revenues and investment, cutting completions to about 609 per year by 2017–2019. Sanctions further depressed activity, with average completions falling to 53 wells during 2020–2025. Activity recovered in 2024 as focus shifted to workovers and reactivations, with completions rising from 32 wells in 2024 to 128 in 2025 (+300%).
Onshore Production & Wells Completed 2016-2030. Source: OPEC Annual Statistical Bulletin, Westwood Wells & Production Outlook.
Onshore crude production reached its nadir in 2020, dropping to 0.5mmbpd before some recovery was recorded through to 2025 (0.9mmbpd), driven predominantly by workovers and above average well completions in 2025 (128). After contracting to 0.8mmbpd in January 2026, due to a tightening of US sanctions before the arrest of Maduro, crude production has grown each month, reaching 1.1mmbpd in May 2026. By late April, reports emerged that international oil companies (IOCs) had reactivated at least nine stacked land rigs, ranging from 500 to 1,500 horsepower, with further rig deployments possible. Westwood has identified that Ensign and PDVSA have further rig reactivations planned for this year, with 2026 rig demand anticipated to increase to 12 units. This, along with heavy workover (WO) and enhanced oil recovery (EOR) activity, could translate to a 48% jump in crude production from January to December 2026, reaching 1.2mmbpd, still 177kbpd below PDVSA’s 2026 crude target.
Beyond 2026, WO and EOR activity will drive production growth, although uncertainty remains about Venezuela’s long-term production uplift profile. However, if the investment climate continues to improve, Westwood anticipates operators to farm into the country, both to support brownfield developments and to develop new fields. This should lead to an increase in the number of onshore wells drilled annually, reaching over 200 in both 2029 and 2030, pushing onshore rig demand up to 26 units by 2030. However, this jump in activity is unlikely to be enough to return to past levels, with Westwood forecasting onshore crude production of 1.6mmbpd by 2030.
Indexed Rig Demand 2016-2030. Source: Westwood Global Land Rigs.
In theory, Venezuela should have sufficient onshore rig capacity to meet expected demand, with Westwood estimating a fleet of nearly 100 rigs. Of these 100 rigs, over half are owned by PDVSA, followed by H&P via its KCA Deutag acquisition. However, there is uncertainty about the condition of Venezuela’s rig fleet, especially those owned by PDVSA or small domestic players. Most rigs in situ have been idle since 2019 and would require reactivation, which could run into multi-million-dollar projects. In addition, many PDVSA-owned units were reportedly cannibalised, sold for parts, or are in poor condition, limiting actual availability. At the same time, shifts in the global rig market toward higher-spec, more automated units mean operators may prefer importing rigs, particularly from underutilised US fleets, rather than restoring rigs currently in the country. This dynamic creates an opportunity for international contractors, though entry will depend on asset security and confidence in sustained growth in activity.
Under a more aggressive development push, domestic rig demand could quickly outstrip supply, creating a clear opportunity for international contractors. However, Venezuela is just one of many countries where Westwood foresees a growth in demand for high-spec rigs, with units already redeploying to markets such as Argentina, Australia and the GCC.
Brent averaged US$93.01 from January to May 2026, up 34.59% from US$69.10 in 2025. Following the 17th of June 2026 US–Iran ceasefire extension, prices eased, though confidence in long-term stability in the strait remains fragile, with the recent end of the ceasefire sending prices back above $80. Should the strait remain open long-term, it awakens a potential for a heavily oversupplied crude market in 2027. For Venezuela, this could deter investment, given that extraction has high lifting costs, meaning that developing projects could be attractive only in a stronger price environment, despite a push for investment from the US administration.
All in all, Venezuela has undoubtedly seen its attractiveness to outside investors change in recent months. A no-go zone coming into 2026, a new leader, and the full-throated support of the Trump administration have reignited interest in a country where production has languished well below potential for years.
Westwood maintains a cautious-optimistic stance on the revival of production, expecting it to reach 2mmboepd in 2030, including 1.66mmbpd of crude oil. Above-ground issues, particularly around regulation, geopolitical stability and infrastructure, continue to be significant bottlenecks to a quick turnaround in development. It is imperative that Venezuela continue to push for near-term investment commitments, particularly in upstream and midstream projects, to support its plans to expand production capacity.
Michela Francisco, Land Rig Analyst
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