(Bloomberg) — Venezuelan oil production will take decades to return to its peak of more than 3 million barrels a day even as a deal with the US prompts a boost in near-term output, according to Rystad Energy.
President Donald Trump announced Friday the US government is partnering with private companies to gain access to 65 billion barrels of Venezuelan oil reserves. Under the arrangement, the US will control 55% of the joint venture’s production and receive the oil at cost. The supply will be used to refill the Strategic Petroleum Reserve, Trump said.
Venezuela’s output is roughly 1 million barrels a day, about one-third of its peak in the 1990s.
Rystad expects incremental oil production to initially come from existing wells, rising from about 157,000 barrels a day in 2027 to 680,000 daily barrels by 2030, according to a market update published Monday by the energy intelligence firm. Those brownfield sites will reach 740,000 barrels of production each day in the early-to-mid-2030s.
New exploration in the country’s Orinoco oil belt will see “meaningful” production starting around 2035 with output of 840,000 barrels a day by 2040 and near 2 million daily barrels by 2050, Rystad forecasts.
With existing and new projects combined, Venezuelan oil output will rise to 2.3 million barrels a day in 2035 and above 3 million barrels daily by 2050. Some $85 billion of investment will be required from 2027 to 2040 to make that happen, according to Rystad.
“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,” Rystad’s senior vice president of Latin American oil and gas Radhika Bansal said in Monday’s note. “The political reaction inside the country, with criticism coming from both Chavista and opposition circles, is a signal that durability is not guaranteed.”
More stories like this are available on bloomberg.com
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