Venezuela Opens Oil Sector to U.S. Investment After Sanctions Ease and Legal Overhaul

In a significant policy shift, Venezuela has moved to attract foreign capital to its beleaguered oil industry, coinciding with a relaxation of U.S. sanctions. The changes signal a potential thaw in economic relations and could pave the way for the first major U.S. energy investments in the country since its assets were nationalized over a decade ago.

Venezuela's National Assembly, under the interim government, passed legislation last week restructuring the oil sector. The new law grants private companies greater control over production and sales, breaking the longstanding monopoly of state-run PDVSA. While the government retains control over resource access, the law introduces key incentives: it maintains a maximum 30% royalty but allows the executive to negotiate lower rates on a project basis, and permits international arbitration for disputes—a crucial safeguard for foreign firms.

Simultaneously, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) issued a general license authorizing U.S. entities to engage in transactions involving Venezuelan oil—including export, purchase, and transportation. Previously, only Chevron operated under a specific exemption. The license mandates contracts under U.S. law and payment through approved, traceable accounts, while barring dealings with entities linked to Russia, Iran, North Korea, Cuba, or Chinese-controlled companies.

The moves follow a White House meeting earlier this month where President Donald Trump urged U.S. energy executives to consider investing in Venezuela, which holds the world's largest proven oil reserves. "This is about reclaiming a strategic energy partner and rebuilding an industry that was once a cornerstone of the region's economy," a senior administration official noted.

However, the road to significant investment remains fraught. ExxonMobil CEO Darren Woods, whose company's assets were seized in 2007, reiterated that Venezuela remains "uninvestable" without deeper political and economic reforms. "Stability, economic recovery, and a transition to representative governance are prerequisites," Woods stated. In contrast, Chevron indicated it could boost its existing Venezuelan production by 50% within two years.

Analysts suggest the changes are a first step, but persistent political uncertainty, infrastructure decay, and legal complexities may deter all but the most risk-tolerant operators. "The door is ajar, but it's not yet wide open," said energy strategist Linda Forsyth. "Companies will proceed with extreme caution, given the history of asset seizures."

Voices from the Industry

Carlos Mendez, Energy Analyst at Global Insights: "This is a pragmatic, albeit incremental, move. The arbitration clause and royalty flexibility address long-standing investor complaints. If security and contract enforcement improve, we could see mid-sized firms entering first."

Sarah Chen, Portfolio Manager at Horizon Capital: "The alignment of U.S. policy and Venezuelan law is notable. This isn't just about oil—it's a geopolitical realignment. Flows of capital and technology could help stabilize the region, but the social and environmental oversight must be robust."

James O'Donnell, Former PDVSA Consultant: "This is a fire sale of national resources by a puppet government. After decades of resisting foreign exploitation, we're now handing the keys back to the very companies that profited before. It's a tragic retreat from sovereignty and a betrayal of the Venezuelan people's wealth."

Rebecca Torres, Latin America Risk Advisor: "The OFAC conditions are smart—they keep revenue streams transparent and exclude adversarial nations. This isn't a blank check; it's a calibrated tool to incentivize reform while limiting Maduro-aligned actors from benefiting."