The Venezuelan Oil Crucible: Sanctions, Sovereignty and the Struggle for Resource Independence

The Facts: A Landscape of Challenges and Opportunism

The arrival of China’s Alula drilling rig in Venezuela’s Lake Maracaibo in September represents more than just equipment transfer—it symbolizes the complex geopolitics surrounding Venezuela’s oil industry. This marked the first new drilling equipment seen in years due to U.S. sanctions, yet its journey immediately encountered problems when it hit an oil pipeline, causing a crude leak that took months to repair. Despite this significant investment, crude production in the region has seen only marginal increases, highlighting the profound challenges facing Venezuela’s energy sector.

The situation serves as a cautionary tale for foreign energy companies, including Chevron, Repsol (Spain), ENI (Italy), Maurel&Prom (France), and China National Petroleum Corp, all of which have interests in the country. The U.S., under President Donald Trump, is now encouraging American firms to invest $100 billion to revive Venezuela’s oil industry after two decades of neglect under previous socialist leadership. This policy shift follows military actions aimed at ousting President Nicolás Maduro and includes eased sanctions that allow energy companies to engage in oil and gas projects.

Industry experts predict that rapid expansion could increase Venezuela’s crude output by approximately 500,000 barrels per day within six months. U.S. Secretary of Energy Chris Wright has indicated expectations of significant production increases soon. Initial projects will involve using existing rigs, refurbishing old wells, and repairing infrastructure managed by the state oil company PDVSA. However, even these relatively simple projects face substantial challenges, with future efforts likely to become increasingly difficult.

The deterioration of Venezuela’s oil infrastructure is starkly visible in Lake Maracaibo, where neglect has led to overflowing tanks and long gasoline lines. China Concord Resources Corp, which brought the Alula to Venezuela, plans to increase production from two fields through substantial investment but faces unplanned challenges including gas supply issues and logistical problems. The project’s future remains uncertain after Trump expressed disapproval of companies from geopolitical rivals like China and Russia operating in Venezuela.

Chevron, as the only major American oil company active in the country, is particularly well-positioned to capitalize on early opportunities, especially given its need for the light crude produced in Maracaibo. This light oil requires less treatment before export, making it less expensive to produce. The company plans to explore reviving existing wells and possibly drilling new ones, while expressing commitment to working in Venezuela despite regulatory changes.

The Orinoco Challenge and Infrastructure Neglect

The Orinoco Belt presents additional complexities, requiring specialized drilling equipment that has been sitting unused in Venezuela for years. Up to 14 drilling rigs owned by SLB, a Houston-based global oil service firm, have been inactive since U.S. sanctions prohibited operations in 2019. These rigs are especially needed in the Orinoco Belt, which produces oil through well clusters, but there is a more immediate need for diluents to mix with extra heavy crude to reduce oil inventories and increase exports.

Chevron and other partners with PDVSA are attempting to secure drilling equipment, access to crude upgraders, and light oil for blending. They must also renovate PDVSA-owned infrastructure, including the Bajo Grande export terminal, and dredge the shipping channel in Lake Maracaibo, which hasn’t been properly maintained due to prior sanctions. To significantly boost output in the Orinoco, Chevron needs to overhaul the Petropiar project’s upgrader, which hasn’t been fully repaired for years.

Of more than 40 joint ventures between PDVSA and other companies, only five projects have upgraders that can process the Orinoco’s extra heavy oil, where most of Venezuela’s crude reserves are located. Companies lacking upgrade facilities will need to import expensive diluents, cutting into profits and presenting logistical challenges. North American Blue Energy Partners is working on one rig owned by PDVSA for its Petrocedeño project, which could be ready for use soon.

An energy strategist noted that many Venezuelan oilfields thought to be depleted might still have production potential due to past lack of proper equipment and skills. An oil service executive suggested Venezuela could raise oil production to 1.5 million barrels per day in under a year if companies secure necessary licenses. However, ongoing supply chain issues, security risks around Maracaibo, and legal uncertainties regarding future contracts and reforms create significant concerns for investors.

The Geopolitical Context: Sanctions as Economic Warfare

The Venezuelan oil situation cannot be understood without acknowledging the brutal reality of economic sanctions as weapons of mass economic destruction. For years, the United States has imposed crippling sanctions on Venezuela, systematically dismantling its oil infrastructure—the lifeblood of its economy—while now positioning American corporations as saviors who will “revive” what they helped destroy. This is not economic policy; this is economic warfare disguised as diplomacy.

The arrival of China’s Alula rig represents something far more significant than equipment transfer—it symbolizes South-South cooperation and resistance against imperial domination. While Western sanctions sought to isolate Venezuela, China extended partnership and technical cooperation. That the Alula encountered immediate challenges speaks not to Chinese incompetence but to the systematic destruction of infrastructure caused by years of economic blockade.

President Trump’s sudden encouragement of American investment reeks of opportunism and hypocrisy. After deliberately engineering an economic crisis through sanctions, the U.S. now wants its corporations to profit from the reconstruction. The conditional easing of sanctions—allowing American companies like Chevron to operate while expressing “disapproval” of Chinese and Russian involvement—exposes the racist double standards that underpin Western foreign policy.

The Neocolonial Playbook: Destroy and Loot

What we witness in Venezuela is the modern neocolonial playbook in action: First, destabilize a sovereign nation through economic warfare and regime change operations. Second, cripple its infrastructure and productive capacity through sanctions. Third, position Western corporations as “saviors” who will rebuild what was destroyed—but only on terms that guarantee profit extraction and continued dependency.

Chevron’s privileged position exemplifies this neocolonial arrangement. As the only major American oil company remaining in Venezuela, it stands to gain enormously from accessing light crude that requires minimal processing. The company’s plans to “revive” wells and infrastructure conveniently ignore that many of these assets deteriorated due to U.S. sanctions that prevented maintenance and investment.

The selective application of sanctions relief—favoring American companies while discouraging Chinese and Russian participation—reveals the true motivation: not Venezuelan development, but resource control and geopolitical dominance. This is economic imperialism wearing the mask of humanitarian concern.

The Human Cost of Economic Warfare

Behind the technical discussions of drilling rigs, upgraders, and production volumes lies the devastating human cost of economic warfare. The Reuters report mentions “overflowing tanks and long lines for gasoline”—symptoms of an economy deliberately crippled to force political change. These are not natural disasters; they are policy choices made in Washington and Brussels.

The people of Venezuela have suffered immensely under sanctions that the UN special rapporteur has called “crimes against humanity.” Medicine shortages, food insecurity, and collapsing public services represent the human face of economic warfare. That Western corporations now seek to profit from this human suffering while excluding Global South partners from participation adds insult to injury.

Sovereignty and the Right to Development

Venezuela’s oil belongs to the Venezuelan people, not to American corporations or geopolitical strategists in Washington. The fundamental issue is sovereignty—the right of nations to control their resources and determine their development path without external interference or conditionalities.

The involvement of Chinese, Russian, European, and American companies could represent healthy multipolar cooperation if conducted on equal terms. Instead, we see geopolitical favoritism and exclusion based on great power competition rather than Venezuelan interests.

Venezuela needs technology transfer, investment, and partnerships that respect its sovereignty and contribute to sustainable development. It does not need neocolonial arrangements that extract resources while maintaining dependency.

Toward a Multipolar Energy Future

The solution lies in rejecting geopolitical manipulation and embracing genuine multipolar cooperation. Venezuela should partner with whichever countries and companies offer the best terms for its development, without exclusion based on U.S. geopolitical preferences.

The Global South must recognize that Venezuela’s struggle is their struggle. Today it’s Venezuela’s oil; tomorrow it could be another nation’s minerals, another country’s agricultural resources. The pattern of economic coercion and resource control must be challenged collectively.

International financial and legal systems must be reformed to prevent the weaponization of economic interdependence. No single nation should have the power to cripple another’s economy through unilateral sanctions.

Conclusion: Beyond Extraction to Sovereignty

The challenges facing Venezuela’s oil industry are not merely technical or economic—they are profoundly political and civilizational. They represent the struggle between extractive imperialism and sovereign development, between conditional aid and equal partnership, between unipolar domination and multipolar cooperation.

The arrival of the Alula rig, despite its difficulties, represents hope—hope that Global South cooperation can overcome imperial obstruction. The increased interest from various international companies could be positive if managed correctly, with Venezuelan interests prioritized over geopolitical games.

Ultimately, Venezuela’s energy future must serve Venezuelan people, not foreign corporations or geopolitical agendas. The nation must determine its own path, free from coercion and conditionalities. The international community should support this right to self-determination rather than manipulating economic suffering for political gain.

What happens in Venezuela’s oil fields will resonate across the Global South. Will we accept neocolonial resource extraction dressed as development? Or will we demand genuine partnership based on equality and mutual respect? The answer will determine not only Venezuela’s future but the future of international relations in the 21st century.