First Oil: Venezuela: maybe something, maybe nothing

KURT S. ABRAHAM, EDITOR-IN-CHIEF & CHIEF FORECASTER 

The headline on this column reflects this editor’s overall feeling about Venezuela at the moment. Yes, this could be an opportunity to set that country right and see oil output start recovering. Then again, given the track record over the years, Venezuela could easily find a way to bungle a transition and wind up with yet another mess. 

One thing is for sure—U.S. President Donald Trump’s lightning-fast operation to remove now-former Venezuelan President Nicholas Maduro and his wife, Cilia Flores, from power on Jan. 3 has blown a number of industry stories clear off the front page. For the first 10 days after that military operation occurred, the news concerning the industry was almost all about Venezuela. As I write this, the fever-pitch interest has cooled a bit, but a day doesn’t go by without something about that country. 

Fig. 1. ExxonMobil Chairman and CEO Darren Woods. Image: ExxonMobil.

What concerns U.S. companies. The fact of the matter is that any major improvement in Venezuela’s upstream oil operations is going to take time, probably a lot of time. Much of the timeline, in turn, is going to depend on how quickly, and well, Venezuela sorts out its political problems and forms a cohesive government. Indeed, this process could take a while, and that means that any governmental “structure” by which foreign companies (mostly U.S.) would want to operate with is not in place yet.  

These are the things that concerned ExxonMobil Chairman and CEO Darren Woods (Fig. 1), when he participated in the Jan. 9 meeting between President Trump and a select group of U.S. oil executives at The White House. While acknowledging that the Venezuelan upstream has a number of positive attributes, like oil just waiting to be developed, Woods noted that a number of things need to be fixed, and thus, to paraphrase his message, it’s not a place where his company is ready to sink large sums of cash. 

“If we look at the legal and commercial constructs—frameworks—in place today in Venezuela, it’s uninvestable,” declared Woods. “And so, significant changes have to be made to those commercial frameworks, the legal system, there has to be durable investment protections, and there has to be a change to the hydrocarbon laws in the country.” 

Woods went on to say, “We’re confident that with this administration and President Trump working handinhand with the Venezuelan government, that those changes can be put in place. And with respect to the Venezuelan government—that perspective—we don’t have a view on. We haven’t talked to the Venezuelan government, and obviously we have yet to assess the people’s perspective with respect to ExxonMobil entering the country.” He also talked about some short-term things that ExxonMobil could do in the country without investing large sums of cash. 

But Trump apparently didn’t hear anything beyond the word, “uninvestable.” From that point forward, his attitude toward ExxonMobil participating in Venezuela soured. On Jan. 11, Trump signaled that ExxonMobil could be excluded from any future U.S. involvement in Venezuela’s upstream, saying he was unhappy with the company’s response during the White House meeting. While flying on Air Force One, he told reporters that Woods was “playing too cute.”  

"I didn't like Exxon's response,” elaborated Trump. “You know, we have so many that want it. I'd probably be inclined to keep Exxon out. I didn't like their response.” 

Now, this editor is going to take up for Woods and support him, and it’s not just because he is a fellow graduate of Texas A&M University. Quite frankly, Woods is right, and Trump is not fully informed and looking at the complete picture. The President would do better to listen to people, who offer him sound advice and the benefit of their many years of industry experience. Woods was right to point out potential mine fields that could await any operator going into Venezuela, including weak legal protections, past asset seizures (which were considerable) and the need for major changes to the country’s hydrocarbon laws. It’s fully understandable that ExxonMobil would not consider re-entering the country until these items are rectified. 

Chevron’s role. Meanwhile, Chevron is still the only U.S. firm operating in Venezuela, thanks to being granted a specific license some years back by the U.S. Treasury. Issued by the Office of Foreign Assets Control (OFAC), the license allows Chevron to produce and export Venezuelan oil under strict conditions. The firm is allowed to operate in Venezuela only in oil projects it already shared with state firm PDVSA. It cannot start new projects or significantly increase production. 

Of course, this will all change now, and Chevron says that it can increase its current production of around 240,000 bopd by roughly 50% in the near term (18-24 months) through disciplined investments in existing assets. Considering that Venezuela’s oil output has averaged 967,220 bpd in the first nine months of 2025, this means that Chevron has been accounting for roughly 25% of the country’s production. If you add another 120,000 bopd, then Chevron’s output would be 360,000 bopd, and Venezuela’s production overall would be 1,087,220 bopd (assuming no incremental production from other sources came online). Accordingly, Chevron’s share of the country’s output would rise to 33%. And mind you, the company says this would take 18 to 24 months. 

While this sounds significant, it actually pales in comparison to some of the country’s better days. In 1997, a little over a year before Hugo Chavez took office as president, Venezuela hit a post-1973 oil production peak, averaging 3.18 MMbpd. By the end of 1999, the country’s output had dropped 10%, to around 2.80 MMbpd. It remained there until 2002, when it dropped another 13%, to about 2.44 MMbpd. After peaking again at about 2.8 MMbpd in 2006 and 2007, Venezuelan oil production dropped to roughly 2.5 MMbpd, where it remained from 2008 through 2015. In 2016, the slide in Venezuelan output resumed and accelerated. By the onset of the Covid pandemic in 2020, output was down to a measly 527,000 bopd. Over the last five years, production has staged a very modest recovery to the current level. 

Fig. 2. The Johan Castberg FPSO and field are symbols of consistent Norwegian upstream competence. Image: Equinor; Photographer, Søren Q. Terkildsen/Søren Ø. Clausen.

So, Chevron boosting national output to 1.1 MMbopd, while an improvement, will not be the realization of President Trump’s desires, at least not in the next two years. It will be interesting to see how things progress (or don’t).  

Norway quietly exudes upstream competence. On Jan. 13, the Norwegian Ministry of Energy demonstrated why Norway continues to be the most competent country in Western Europe, when it comes to upstream oil and gas, Fig. 2. On that date, the ministry offered 57 new production licenses to 19 companies on the Norwegian Continental Shelf under the APA 2025 (Awards in Predefined Areas) licensing round. Officials made the move, as part of an effort by the country to slow an expected decline in oil and gas output and sustain energy deliveries to Europe.  

The licenses span Norway’s three main offshore regions, with 31 awards in the North Sea, 21 in the Norwegian Sea, and five in the Barents Sea. All licenses feature binding work programs that require either activity or relinquishment back to the government. 

“Norway is Europe’s most important energy supplier, but in a few years, production will begin to decline,” said Norwegian Minister of Energy Terje Aasland in prepared remarks. “Therefore, we need new projects that can slow the decline and deliver as much production as possible.” According to the ministry, 13 of the 19 companies awarded acreage were granted one or more operatorships.  

The APA system promotes continued exploration and development in mature areas. The goal was to facilitate the discovery and extraction of profitable resources in mature areas before existing infrastructure is shut down, ensuring efficient resource recovery and value creation. The APA 2025 round attracted applications from 20 companies following its formal announcement in May 2025, with the ministry finalizing awards after technical and commercial evaluation of submissions. 

Among the largest recipients were Equinor, Aker BP, DNO, Vår Energi and Harbour Energy, alongside additional international and independent operators. 

HM Treasury handed letter from thousands of businesses and workers calling for new North Sea tax regime. Over the last six months, it seems like we have covered the moronic attitude of UK Prime Minister Keir Starmer’s regime toward the British North Sea ad nauseum. However, just to show you that World Oil is not the only entity concerned about this situation, we bring you news of a large-scale coalition of people and businesses that recently called on the British government to install a new North Sea tax system. 

Fig. 3. Ben Martin, Policy Manager at British Chambers of Commerce (left), and Aberdeen & Grampian Chamber of Commerce Chief Executive Russell Borthwick (right), deliver the massive public letter urging the UK government to fast-track a new North Sea fiscal regime. Image: Grampian Chamber of Commerce.

On Dec. 10, 2025, more than 7,000 companies, business leaders and workers signed, and had delivered, a massive public letter (Fig. 3) urging the UK government to fast-track its new North Sea fiscal regime, amid growing concerns over thousands of avoidable job losses.  

The letter—which gained support from First Minister of Scotland John Swinney and senior leaders across Scotland’s energy, business and public sectors—was handed over to senior HM Treasury officials at a meeting in London on Dec. 10 by Aberdeen & Grampian Chamber of Commerce (AGCC) Chief Executive Russell Borthwick and Ben Martin, Policy Manager at British Chambers of Commerce. 

According to AGCC, “Chancellor Rachel Reeves’ decision to extend the Energy Profits Levy (EPL) to 2030 threatens tens of thousands of jobs across the UK energy sector and places the entire energy transition at risk. The crippling 78% tax has already been blamed for thousands of redundancies, including 700 at Harbour Energy, while more than 800 jobs have been lost at major infrastructure hubs at Grangemouth and Mossmorran.” 

The AGCC also said that the UK government has already designed a new, fairer North Sea regime—the Oil & Gas Price Mechanism (OGPM)—which would only apply when prices are elevated, ranging from an oil price of $90 next year through to $97 in 2030. The Chamber is calling for this regime to be introduced four years earlier, in 2026. One can only hope that Starmer’s group sees the logic of this, but don’t count on it. 

Meanwhile, a significant majority of voters across Scotland back FULL development and extraction of North Sea oil and gas, according to new Scotland-wide polling, as job losses mount across the sector. The findings from Survation, conducted for True North Advisors, show 58% of Scotland’s residents back FULL development, compared to just 13% opposed, as industry leaders have linked the UK government’s Energy Profits Levy (EPL) to waves of redundancies. 

Four months ahead of Scottish Parliament elections, public opinion is also clear on energy sourcing, with 75% saying the UK should meet as much demand as possible from domestic North Sea supply, rather than imports. Meanwhile over 60% agree that North Sea energy companies have a positive impact on the UK economy. So, Keir Starmer, are you listening? 

IN THIS ISSUE  

Special focus: Hydraulic fracturing. We have a very full lead section this month. In the first feature, a MaverickX author discusses how molecular fracing, a rock-focused, field-ready stimulation chemistry, can improve production. A second article from QuantumPro describes a 3D-printed, snap-on nanoparticle delivery system for gun-agnostic cluster-level flow mapping. Third in our section is sponsored content from Halliburton, which discusses the attributes of ZEUS IQ™, the industry’s first fully autonomous, closed-loop hydraulic fracturing solution. Up fourth is an article from Liberty Energy Senior V.P. and World Oil Editorial Advisor Leen Weijers, who does a fine job explaining the benefits of the recent innovation of simulfracing. Our fifth feature is authored by an SPM Oil & Gas expert, who describes leveraging a linear pressure control strategy for competitive advantage. Finally, our last article from three University of Utah professors is a follow-up to their feature from a year ago, as they work to optimize hydraulic fracturing by managing fracture toughness and stress shadow effects in the Paradox basin. 

FPSO technology: The evolution of remote-controlled FPSOs. An ABS author discusses how remote-controlled FPSOs are a first step toward autonomous offshore operations, once advanced solutions address significant technical gaps. With digitalization charting a new course for autonomous offshore operations, it is likely an unmanned FPSO will soon operate in the farthest reaches of ocean depths, where untapped resources lie in wait. 

Regional report: The Arctic. Contributing Editor Gordon Feller says that the industry and governmental focus on Arctic oil and gas sharpened during 2025. A growing list of new initiatives from governments and private companies aims to push forward with Arctic exploration and development. Both the U.S. and Canadian governments are opening federal lands and waters for drilling. Meanwhile, Norway continues to explore and drill in the Arctic, even amid domestic and international climate backlash. Not to be outdone, Russia persists with its own expansion program to grow its Arctic footprint in cooperation with China.