Venezuela, home to the world’s largest proven crude oil reserves, would need to invest an estimated $183 billion over the next 15 years to restore its oil production capacity to 3 million barrels per day (bpd) by 2040, according to energy research firm Rystad Energy.
The target level was last seen in the late 1990s, underscoring the scale of decline the country’s oil sector has suffered over decades of underinvestment, sanctions and operational challenges, reported Business Standard.
At present, Venezuela produces around 1.1 million bpd, a fraction of its historical peak. Rystad’s assessment highlights that without sustained and substantial capital inflows, any meaningful recovery in output will remain difficult.
A sector shaped by politics and geopolitics
The outlook for Venezuela’s oil industry has been thrust back into the global spotlight following the capture of Venezuelan President Nicolas Maduro. In the aftermath, US President Donald Trump said that American oil companies would take control of Venezuela’s crude production and “rebuild the oil infrastructure” of the country.
The statement has fuelled fresh debate over how quickly Venezuela’s oil sector could be revived if political uncertainty eases and sanctions-related constraints are relaxed. However, analysts caution that even with improved access to technology and capital, rebuilding the sector will be a long and capital-intensive process.
The cost of simply standing still
Rystad Energy estimates that Venezuela would need to spend about $53 billion on upstream oil and gas projects and related infrastructure over the next 15 years just to prevent production from falling further and to keep output flat at around 1.1 million bpd. This so-called “hold-flat” investment reflects the ageing condition of oilfields, pipelines and processing facilities.
The firm added that only about 300,000 bpd of additional supply could be restored within the next two to three years with relatively limited incremental spending. Beyond that, more ambitious production growth would require consistent and higher annual investment.
What it takes to reach 3 million bpd
According to the report, lifting production beyond 1.4 million bpd would require a stable investment of around $8-9 billion every year from 2026 to 2040, in addition to the capital needed to maintain existing output. Under this scenario, Venezuelan crude oil production could recover to 2 million bpd by 2032 and eventually reach 3 million bpd by 2040.
“While some of this investment can be financed organically by national oil company PDVSA, at least $30–35 billion of international capital would need to be committed in the next 2–3 years to make a 3 million bpd-by-2040 scenario plausible,” Rystad Energy said.
Rich reserves, poor output
Despite holding about 18 per cent of the world’s oil reserves, Venezuela currently accounts for only around 0.8 per cent of global crude output. The mismatch reflects years of underinvestment, infrastructure bottlenecks and limited access to international finance and technology.
China and the US are presently the largest buyers of Venezuelan oil, even as sanctions and payment restrictions continue to complicate trade flows.
Why India is watching closely
A revival in Venezuelan oil and gas production could also have implications for Indian energy companies. Oil and Natural Gas Corporation (ONGC) and Reliance Industries (RIL) are seen as potential beneficiaries if Venezuela’s output ramps up and international engagement resumes.
ONGC Videsh Ltd (OVL) has stakes in two Venezuelan oil fields, San Cristobal and Carabobo-1. OVL acquired a 40 per cent participating interest in the San Cristobal project in 2008 and has made a cumulative investment of $529.33 million in the field. It has also invested $240.66 million in the Carabobo-1 project up to March 31, 2025.
These investments have been accounted for as impairments in OVL’s books due to sanctions. However, the company currently has dividends of more than $500 million pending from the San Cristobal project, highlighting the financial upside that could emerge if restrictions ease.
While Venezuela’s oil reserves remain vast, Rystad’s analysis makes clear that restoring production to historical levels will require time, political stability and sustained global investment. Even under optimistic assumptions, the journey back to 3 million bpd stretches well into the next decade, with the outcome hinging on both domestic reforms and international engagement.
