Developing Story
ConocoPhillips Venezuela Operations Return (2026)
ConocoPhillips has sent an evaluation team to Venezuela for the first time in nearly two decades, signaling a potential return to one of the world's largest oil reserve bases. The move is driven by post-Iran war energy supply pressures but faces complex OFAC sanctions compliance and outstanding multi-billion-dollar arbitration awards against Venezuela. A successful re-entry would catalyze broader industry return to Venezuelan production.
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## Overview
ConocoPhillips has dispatched a team to Venezuela to evaluate prospects for a return to drilling, nearly two decades after billions of dollars in assets were seized by the Hugo Chávez government. This marks a significant potential re-entry into one of the world's largest proven oil reserve bases.
## Background
- ConocoPhillips exited Venezuela circa 2007 after nationalization of its Orinoco Belt heavy oil projects
- The company pursued international arbitration and ultimately secured approximately $8.7 billion in awards against Venezuela (ICSID and ICC)
- Venezuela's proven reserves are among the world's largest but production has collapsed from ~3.5M bpd to under 900K bpd amid mismanagement, sanctions, and underinvestment
## Current Drivers
- Post-Iran war energy supply disruptions create strong incentive to reactivate Venezuelan production
- The Trump administration has signaled conditional openness to Venezuelan oil engagement depending on political compliance
- PDVSA's operational capacity has severely degraded; foreign technical expertise is essential for recovery
## Legal & Arbitration History
- Outstanding arbitration awards complicate any re-entry; settlement or offset arrangements with Venezuelan government likely prerequisite
- OFAC sanctions on Venezuela remain in place but have been selectively waived for specific operators
- Any new contracts must be structured to comply with current OFAC General Licenses or obtain specific licenses
## Business Implications
- Successful re-entry would require joint ventures with PDVSA under Venezuelan law mandating majority state ownership
- Other majors (Chevron already present under license) may accelerate their own expansion if ConocoPhillips signals commitment
- Service companies, equipment suppliers, and infrastructure contractors would follow major operator commitments
## Watch Points
- Outcome of evaluation team assessment
- OFAC license status for ConocoPhillips Venezuela activities
- Settlement negotiations on existing arbitration awards
- Venezuelan government's political conditions for re-entry
- Chevron's response and competitive positioning