Global energy major Chevron Corporation (CVX Quick QuoteCVX - Free Report) is following the footprint of Shell plc (SHEL Quick QuoteSHEL - Free Report) and moving closer to major oil production agreements in Venezuela, marking a significant shift in the nation’s energy sector. These deals could become the first major upstream investments since the political developments surrounding President Nicolás Maduro earlier this year.

If finalized, the agreements would allow international oil companies to expand operations in some of Venezuela’s most resource-rich regions. The developments are viewed as a step toward rebuilding the country’s struggling oil industry, a goal strongly emphasized by U.S. President Donald Trump, who has highlighted a massive investment potential to revive Venezuela’s energy infrastructure after decades of decline.

Oil Law Reform Opens Doors to Foreign Investment

A major catalyst for renewed interest is Venezuela’s recent reform of its primary oil legislation. The country’s National Assembly approved changes that grant foreign companies more operational autonomy—even when they are minority partners in projects with the state oil company PDVSA.

Under the revised framework, international operators can manage production, exports and sales of Venezuelan crude. This shift aims to attract capital and technical expertise to a sector that has suffered from years of mismanagement and underinvestment during the administrations of Nicolás Maduro and his predecessor Hugo Chávez.

Chevron Expands Presence in the Orinoco Belt

Chevron, currently carrying a Zacks Rank #3 (Hold), is reportedly close to expanding its largest Venezuelan project, Petropiar, located in the massive Orinoco Belt—home to more than 75% of the country’s crude reserves. The proposed deal would give Chevron rights to develop the Ayacucho 8 block, a large area with proven extra-heavy oil resources. Chevron and Venezuelan energy authorities have also reached preliminary terms to expand the company’s largest oil venture, the Petropiar project, in the vast Orinoco Belt.

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By extending its well-cluster production system from Petropiar to Ayacucho 8, Chevron could quickly scale output from the region. If completed, the project would represent the company’s fifth operational area in Venezuela and potentially make it the largest private producer in the Orinoco Belt. ConocoPhillips (COP Quick QuoteCOP - Free Report) had a historical presence in the region and used to be one of the top foreign producers in the Orinoco Belt before it exited the country during earlier nationalization efforts. COP is negotiating a potential return to Venezuela despite $12 billion in claims from past asset nationalizations. CEO Ryan Lance discussed debt resolution options, including possible write-offs, during White House meetings as reforms unwind PDVSA's monopoly. This could enable ConocoPhillips to re-enter lucrative fields, balancing risks with global supply diversification needs.

CVX’s expansion could also increase production of upgraded Hamaca crude and related refined products, strengthening Venezuela’s export capabilities. Chevron is seeking a lower royalty rate for the new area, along with additional tax and trade incentives offered under new legislation aimed at developing greenfield oil and gas projects.

Shell Pursues Oil and Gas Projects in Eastern Venezuela

While Chevron focuses on heavy oil production, Shell is progressing on a broader mix of oil and gas initiatives. Last week, the company signed preliminary agreements with Venezuelan authorities and several engineering partners, including KBR and Baker Hughes.

The agreements reportedly target the development of the Carito and Pirital fields in the Monagas North region. These fields produce light and medium crude as well as natural gas—valuable resources used to blend with Venezuela’s heavier crude grades to facilitate exports.

Shell’s strategy also aligns with its broader focus on natural gas. The Monagas region sits close to existing gas infrastructure and includes some of the country’s largest gas-flaring areas. Future projects could involve capturing and processing this gas for export, potentially via neighboring Caribbean energy networks.

Growing Interest From Other International Energy Companies

The Venezuelan government and PDVSA are also in discussions with multiple international partners interested in expanding operations into adjacent fields and undeveloped blocks. Among them is Repsol, which already has significant financial exposure in the country due to unpaid debts accumulated during the sanctions period.

Authorities are reviewing existing oil and gas contracts to determine which projects remain viable and which could be revoked due to inactivity or missed investment commitments. The review also includes production-sharing agreements and joint ventures with international operators.

At the same time, the United States is reportedly scrutinizing potential partnerships to ensure compliance with sanctions and regulatory requirements before approving any new ventures.

A Potential Turning Point for Venezuela’s Oil Industry

If finalized, Chevron’s and Shell’s new agreements could mark a major turning point for Venezuela’s energy sector. The country holds some of the world’s largest oil reserves but has struggled to maintain production due to sanctions, lack of investment and aging infrastructure.

By allowing greater foreign participation and operational control, Venezuela is attempting to rebuild its oil industry and restore production capacity. For international energy companies, the reforms represent a rare opportunity to access vast untapped reserves—while navigating a complex geopolitical and regulatory environment.