Shell Eyes Venezuelan Prize Amid Policy Shift and Industry Jockeying

The geopolitical landscape around Venezuela’s energy sector is shifting dramatically, and major oil companies are carefully watching—or rather, eyeing—the emerging opportunities. Shell plc is among those recalibrating its strategy toward Venezuela’s untapped gas reserves after years of regulatory gridlock. The company has long pursued the Dragon gas field, a major deposit straddling Venezuelan and Trinidad and Tobago waters, but U.S. sanctions and bureaucratic delays repeatedly blocked progress. With the Trump administration now signaling openness to renewed energy investment, Shell and other international oil majors are reassessing their Venezuela playbook.

The Dragon Field: A Multi-Billion-Dollar Prize

The Dragon gas field holds approximately 120 billion cubic meters of gas—roughly triple the United Kingdom’s annual consumption. If successfully developed, it could generate around $500 million annually for three decades, representing a lifetime value potentially exceeding several billion dollars. Adjacent fields contain even larger deposits, underlining why energy companies view this region as strategically crucial for securing long-term gas supply.

Development has stalled repeatedly due to regulatory uncertainty and the need for U.S. sanctions waivers and licensing approvals. Now that Washington’s stance is warming toward Venezuelan energy development, interest among international majors is quickening, though most remain publicly cautious about their intentions.

Washington’s New Energy Strategy Reshapes the Competition

The Trump administration has reframed Venezuela policy around energy development and infrastructure revival. Administration quotes emphasize the need for billions in investment to restore production capacity, with a stated preference that U.S. companies take the lead in such efforts. This strategic opening creates a tiered hierarchy within the international oil sector.

Chevron Corporation currently stands alone as a global supermajor actively operating in Venezuela, making it the country’s largest foreign investor. The company is widely regarded as best-positioned to capture early opportunities under the new political framework. European competitors like Shell and BP p.l.c. may eventually gain access through joint ventures, a structure that would help American firms manage political and financial risk while still advancing the broader development agenda.

BP holds its own card through the Manakin-Cocuina exploration license, granted in 2024, though U.S. approvals were subsequently revoked. The company is lobbying for reinstatement, a sign that strategic patience characterizes the industry’s approach despite elevated uncertainty.

Venezuela’s Resource Paradox

Venezuela sits atop the world’s largest proven oil reserves—over 300 billion barrels according to government estimates—yet produces only about 900,000 barrels daily, ranking 20th globally. Chevron accounts for roughly one-third of current output. The nation’s crude is predominantly heavy and viscous, prized by refiners along the U.S. Gulf Coast and in Asia for superior margins, despite being costlier to process than lighter oils.

As U.S. shale production tilts toward light crude, Venezuela’s heavy oil remains strategically valuable to global refiners—but only if infrastructure and political stability allow it to flow reliably to markets.

The Headwinds Investors Face

Trump’s call for Venezuelan production ramps collides with a crowded global oil market. Prices hover below $60 per barrel, dampening enthusiasm for capital-intensive, high-risk ventures. Companies can deploy capital in lower-risk jurisdictions with clearer regulatory paths and stronger asset protection. The investment calculus tilts away from Venezuela unless political risk premiums compress substantially.

Historical precedent weighs heavily. Exxon Mobil and ConocoPhillips fled Venezuela in 2007 after the government seized assets, launching arbitration claims that dragged through international courts for years. Such memory lingers, making legal certainty the prerequisite for renewed capital commitment.

OPEC’s Fragile Position Under Threat

An opening of Venezuela to Western investment could fundamentally shift global oil market dynamics. If production scales toward 1-2 million additional barrels per day, global supply would likely tip into surplus territory. OPEC’s control over price defense has already weakened—oil prices collapsed in 2025, recording the steepest annual decline since 2020.

Although OPEC+ agreed to pause new production increases in early 2026, accelerated Venezuelan output would further erode the cartel’s pricing power and redraw global supply chains away from Middle Eastern producers.

Institutional Reconstruction: The Real Challenge

Beyond politics and prices lies a deeper structural hurdle. Decades of mismanagement, corruption and political interference have gutted Venezuela’s energy sector. Skilled workers have emigrated, infrastructure has crumbled, and institutional capacity remains compromised. Serious revival requires debt restructuring, resolution of lingering arbitration disputes, and access to multilateral finance—commitments that extend well beyond a single energy project.

For Shell, Chevron, BP and peers, Venezuela represents immense resource potential. Whether that potential translates into realized value depends on durable political commitments, institutional stability, and a credible pathway to sustainable returns across multiple decades.