VENEZEULA Trends and Developments Contributed by: Maryna Pogibko, Rafat A Rizvi and Mykhailo Grydzhuk, Amadeus
Amadeus 8-10 Hill Street London W1J 5NG United Kingdom Tel: +44 020 7788 7591 Email: info@amadeus.london Web: www.amadeus.london
Venezuela’s Oil Reopening: Investment in a Sanctions-Shaped Market A new market is opening, but only through legal architecture The months following the 3 January capture of Nico- lás Maduro have seen a notable easing of the ten- sions that have defined relations between Washington and Caracas for over two decades. The prospects for the Venezuelan economy are now brighter than they have been since the early years of Hugo Chavez’ presidency. In March, Paraguay, as the current head of the regional MERCOSUR ( Mercado Común del Sur , or Southern Common Market) trading bloc, pro- posed lifting the suspension of Venezuela’s member- ship (in place since December 2016). Such a move would have a profound impact on both Venezuela’s geo-political isolation and the Venezuelan economy, particularly as MERCOSUR and the EU signed a free trade agreement in January 2026. It is the oil and gas industry, however, which is by far the most significant factor in determining the eco- nomic health of Venezuela. The sector has moved from being a sanctions liability to a cautiously recog- nised market opportunity, albeit one with few parallels. Despite this evolving context, the Trump Administra- tion has neither lifted sanctions nor stepped aside. It has, however, created a permissions-based frame- work under which oil trading, supply arrangements, project participation and certain new investments may proceed, but only under carefully defined general licences. Many sectors of the Venezuelan economy remain under US sanctions. For investors, traders and operators this distinc- tion is critical. Venezuela is not returning to a “nor-
mal” investment environment but it is emerging as a sanctions-shaped market ‒ meaning that commercial opportunities exist, but the legal route to that oppor- tunity is part of the deal itself. Contract structure; pay- ment mechanics; eligible counterparties; governing law; dispute resolution and reporting obligations are no longer secondary considerations. Anyone wishing to enter the sector must understand that these are central to market entry. That is why the current moment matters. In March this year, Venezuela informed the Organization of the Petroleum Exporting Countries (OPEC) (of which it is a founding member) that daily oil production exceeded one million barrels per day (bpd) for the first time in six months, and media reports indicate that production reached 1.1 million bpd, up from a daily average of 890,000 barrels in 2024. Cargoes are moving, volumes are rising and market participation is broadening and deepening. Why then are so many potential partici- First and foremost, it is politics. Since 3 January, the US has chosen to co-operate with former Vice Presi- dent and now acting-President, Delcy Rodríguez, as it pursues a plan to stabilise the country and reopen key sectors to foreign capital. In turn, Rodriguez was rewarded for her efforts by being removed from the Office of Foreign Assets Control (OFAC) sanctions list. The second change came on 29 January, when the Venezuelan National Assembly (headed by Presi- dent Rodriguez’s brother, Jorge) approved sweeping reforms of Venezuela’s so-called Hydrocarbons Law. The new framework has lowered taxes; expanded the pants sitting on the sidelines? What has changed in 2026?
574 CHAMBERS.COM
Powered by FlippingBook