Venezuelan Oil: US-Venezuela Deal Aims to Cut Costs and Boost Competitiveness

In an analysis of the agreement between the United States and Venezuela for the exploration of Venezuelan oil, Marcus D'Elia, a partner at Leggio Consultoria — which specializes in O&G and renewables —, assesses how investments in production and logistics infrastructure could increase the efficiency of the chain and make Venezuelan oil more competitive in the US market.

The goal of the agreement between the United States and Venezuela for the exploration of Venezuelan oil is to make production and transport within the country more efficient, securing margins and allowing it to compete with Canadian oil in the Gulf of Mexico. Venezuelan oil is already displacing Mexican oil in the region, and as production efficiency at the fields and transport across the South American country's logistics network improve, the cost of the product could fall, making it more competitive than Canadian oil for supplying refineries in the Gulf of Mexico.

"One point worth highlighting in the deal is that the 65 billion barrels in reserves — 1.3 times the United States' current reserves — are proven. Proof of commerciality matters, because it ensures this oil will actually be produced at a viable cost and volume. At a daily production rate of 2 million barrels, it would take roughly 90 years to deplete the entire reserve," D'Elia explains.

The legal framework in Venezuela underpinning the deal announced by the US government is set out in the Organic Hydrocarbons Law, amended in January 2026. Under the model to be implemented, a private company will be responsible for oil production and export, with no ownership stake held by the Venezuelan government. That company, North American Blue Energy Partners, will carry out an estimated $100 billion in investment and will broker the sale of the product to the US government.

"One open question is still the $100 billion investment figure, which is above what would typically be expected to reach a production volume of 2 million barrels per day. For fields with the profile found in the Orinoco and Maracaibo basins, that number would typically fall between $30 billion and $50 billion. There's still no precise information on the full scope of investment included in the deal," D'Elia adds.