Carabobo, located in the heart of Venezuela’s Orinoco Belt, is one of the world’s largest oil fields and was expected to pump 325,000 barrels of crude a day this month – more than a third of the country’s entire oil production.
Instead, the sector, operated by state-owned Petroleos de Venezuela (PDVSA), is languishing.
Internal estimates seen by the Financial Times suggest its output this month is a third below target. A PDVSA engineer, speaking on condition of anonymity, blamed the US naval blockade for cutting key supply and oil export routes.
But he acknowledged that, like Venezuela’s vast energy sector, Carabobo lacks equipment and investment. There are no rigs available to drill new wells, he said. Only one upgrader – which converts the country’s heavy, tar-like crude into higher quality oil – is fully operational.
Donald Trump has promised a reboot.
After ousting President Nicolas Maduro, he said, “We’re going to join our very big United States oil companies, which are the biggest in the world, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.”
But Venezuela’s crumbling infrastructure could pose major obstacles.
poor infrastructure
According to analysis by satellite intelligence company Kairos, visible signs of neglect include dilapidated tanks and unusual storage patterns at the country’s facilities.
Some content could not be loaded. Check your Internet connection or browser settings.
While Venezuela has about 17 percent of the world’s proven crude oil reserves, according to the U.S. Energy Information Administration, and pumped more than 3.5 million barrels a day at its peak in the 1970s, today it produces less than a third of that total.
The facilities and network have fallen into disrepair due to years of underinvestment. Persistent maintenance failures have resulted in fires, explosions and leaks.
Kairos analysts said some facilities were in a “disastrous state”, citing disrepair, underinvestment and “misuse of equipment”.
Further satellite imagery and analysis suggest similar declines at other sites.
Despite the country’s growing need for storage capacity as a result of the US blockade of Venezuelan crude exports announced in December, at the industrial port and oil terminal of Puerto La Cruz, four large storage tanks lie incomplete and have not been used for years.
According to Carros, at the Bajo Grande and Puerto Miranda terminals in the western region, many tanks have deteriorated due to corrosion and lack of maintenance, while sludge accumulation has reduced operational efficiency.
Operations at the large interconnected Amue and Cardón refineries on the northern Paraguaná Peninsula have declined sharply. Reports last year indicated they were running at less than 20 percent capacity, becoming “de facto storage centers,” Half said.
a fire And a power blackout According to reports, both ceased operations in Cardone over the past two years.
The country’s main export terminal, Puerto Jose, had the highest fill rates, yet some of its equipment still remained out of service, according to analysts.
According to Carros estimates, about a third of Venezuela’s storage capacity is currently idle, reflecting low refinery operating rates, storage tanks going out of service, and declining oil production.
A leaked document from PDVSA in 2021 stated that its pipelines had not been updated in 50 years and estimated that the cost of bringing the country’s system back to peak production levels would be $58 billion.
Recent estimates put the figure at 10.5 percent $100bn or more.
“The industry was basically destroyed by the regime,” said Jairo Rincón, a former PDVSA engineer who now sells equipment to Venezuela’s energy sector.
long fall
The decline of Venezuela’s energy industry began under Hugo Chávez in the early 2000s, when private companies were forced out and oil fields were confiscated from companies such as ExxonMobil and ConocoPhillips, both of which are still demanding billions of dollars in compensation.
“Everything broke down,” Rincón said, adding that before Chávez, “everybody who was in the oil and gas industry around the world was involved in Venezuela”.
PDVSA was called upon to finance social programs to increase support for the government, which was draining its resources. Companies providing high-tech services to the oil industry were left unpaid.
US sanctions imposed in 2017 blocked the company’s access to foreign capital and then the US market for its oil. PDVSA defaulted on its bonds and had to repay its debt in crude oil.
Corruption has become endemic. “In companies that are still owned by PDVSA or the government, you have to pay commissions. Corruption is the only way of life,” Rincón said.
While Venezuela’s reserves top international rankings, exports have fallen.
The biggest casualty of Venezuela’s isolation is a vast field called El Furial, which was producing more than 400,000 barrels of light crude in 2008 before the technically challenging operation, which was run by two Western companies, Wood Group and Williams, was nationalized.
Today, El Furial’s output was “negligible,” said Carlos Bellorin of energy data company Velizance. It is possible to fix the area, but it will require huge investment and technical expertise.
Other parts of the oil supply chain are also facing long-term problems – a symptom of broader systemic neglect.
At ports, sanctions and export restrictions have kept tankers stranded offshore, and reportedly due to poor equipment and mismanagement. loading slowed down Of supertankers.
A 2023 report from state oil company PDVSA, leaked to Reuters, said much more than that Half of the 22 oil tankers The Venezuelan fleet was so depleted that it required repairs or was taken out of service.
The country is also dependent on an aging pipeline network, with stretches more than 50 years old, posing a structural challenge to transporting crude from wells to refineries, according to the U.S. Energy Information Administration. The system often breaks down, causing leaks.
Lake Maracaibo suffers from long-term oil contamination due to decades of nearby extraction and decay of infrastructure. environmental groups and satellite analysis Pointed to continued oil leakage from damaged pipelines over the years.
The Reuters news agency also captured an oil spill at the El Palito refinery in August last year, which polluted a bay off the country’s north-central coast in the Caribbean Sea.
The Washington-based Center for Strategic and International Studies reported in 2021 that PDVSA itself estimated that bringing production back to late 1990s levels would require about $8 billion to update pipeline infrastructure alone – a likely low estimate.
Tom Liskey, Latin America manager for energy analytics provider Enverus, says Venezuela’s economic and political collapse has led to widespread shortages of food, medicine and fuel, with reports of both criminals and residents looting infrastructure for income.
He describes the desperation that causes “families trying to get some scrap metal to put some food on the table for their families”.
Persistent underinvestment in the country’s massive infrastructure has led to frequent power cuts, leaking water pipes and potholed roads across the country – which is likely to indirectly impact efforts to increase oil production.
A nationwide blackout in 2019 – caused by brush fires and neglected transmission lines at the Guri Dam – cut power in the oil-rich Orinoco Belt, where heavy crude oil became a sludge, causing permanent damage and an estimated GDP suffered a blow of $2.9 billion,
way back
Reviving the oil industry will require not only huge investments, but also the return of large numbers of Venezuelan engineers and energy experts who have fled abroad over the past two decades.
“We need to bring the manpower back,” said Rincon, who said he was planning to return. “We need the experts that we have around the world.” If they do return, he said, “I’m very optimistic that the industry will fully recover and it will take years, not decades.”
Most analysts believe the country could increase output by a few million barrels per day in the short term, but increasing it further would require the kind of investment that should be underpinned by legal assurances, said Elizabeth Elzuri, an oil and gas expert who has worked on energy reforms across Latin America.
He said the American oil companies that Trump wanted to rebuild the region would probably take time to analyze the situation before investing.
“You have to have a durable contract that will survive over time, that is given by someone who has legitimate authority. You want the contract to be consistent with the constitution of the country and you want there to be the rule of law.”
With companies investing billions on decades-old contracts, they will also seek international arbitration rights and international treaties between the government and the US to ensure contracts are honored.
Venezuela’s existing laws may need to be changed to allow foreign private participation, and its financial system may also need to be changed before oil companies can proceed.
He further said, “It will take time. The infrastructure and whatever needs to be built will take time. The framework has to be prepared.”
Additional reporting by Caroline Nevitt and Clara Murray
From data on tank storage rates kairosLast updated 30 December 2025. Data on the locations of pipelines, processing and storage facilities Envers
