Venezuela Reopened Its Oil Fields, and Exxon Has Still Not Said Yes

Venezuela · Energy

Venezuela has spent this year rebuilding the legal machinery that lets foreigners drill there. The companies most often named have not signed anything binding.

The Puerto La Cruz refinery in Anzoategui state, the region where Continental Resources signed its memorandum with PDVSA (Photo: Wikimedia Commons, CC BY-SA 3.0)

Continental Resources announced a memorandum of understanding with PDVSA on 16 September 2026. Reuters reported the same day that Exxon is advancing talks about a separate field.

What Continental Actually Signed

The agreement covers the Ayacucho 2 block, north of the Orinoco river in Anzoategui state.

It runs to roughly 126,000 acres, and the company would hold a 100% working interest.

The figure in every headline is 30 billion barrels. That is oil in place, not recoverable reserves.

Extra-heavy Orinoco crude is typically recovered at single-digit to low double-digit percentages of what sits underground.

The memorandum is non-binding. The parties say they intend to sign a participation contract in the coming weeks.

Continental is a private Oklahoma company built on shale. It has no upgrading experience with extra-heavy crude.

The Exxon Report, and the Quote That Cuts Against It

Reuters reported that Exxon is advancing talks to return to Petromonagas, formerly Cerro Negro.

Exxon held 41.67% of that project before the 2007 nationalisations. Neither the company nor PDVSA commented.

The only person on the record is President Trump, who said on 31 August that Exxon is going in.

That is a political statement, not a corporate one, and the distinction matters here.

In January the company’s chief executive, Darren Woods, called Venezuela uninvestable at a White House meeting.

He said the company’s assets had been seized twice, and a third entry would need significant change.

Nine months later Exxon has still said nothing. Silence is not agreement.

The Arbitration Nobody Has Settled

Exxon won an award at the World Bank arbitration body over the 2007 seizures, later cut sharply on annulment.

Venezuela has paid a fraction of the sum owed. ConocoPhillips is owed more than US$10 billion.

The main enforcement route, the auction of Citgo’s parent, has been left in limbo by the US Treasury.

ConocoPhillips has been blunt. Its chief executive said investing more without relief would be difficult.

So the unpaid awards from the last expropriation sit underneath every conversation about the next investment.

The Law That Changed in January

Venezuela’s National Assembly amended the Organic Hydrocarbons Law on 29 January 2026. Implementing rules followed on 7 July.

It created a new vehicle, the production participation contract. The investor carries the management, the cost and the risk.

The state keeps ownership of the deposits. PDVSA’s minimum stake in joint ventures fell from 60% to 50.1%.

Royalties are capped at 30%. An integrated tax is capped at 15% of gross monthly income.

Income tax is 50% as standard and 34% on new fields. Combined takes run from about 20% to 35% by project type.

Investors must be domiciled in Venezuela and approved by the hydrocarbons ministry. Selling the oil needs a separate permit.

What Sanctions Still Block

Nobody has lifted the sanctions. PDVSA remains a specially designated national, as does the central bank.

What exists instead is a stack of general licences, and Washington can revoke any of them.

One licence covers purchases and refining. Others cover diluents, and goods and services for exploration.

Read the exclusions. The exploration licence does not authorise forming new joint ventures.

A further licence lets American firms negotiate and sign contracts that are contingent on later approval.

That is why Continental could sign a memorandum. Performing it will need a separate, specific authorisation.

A January executive order also routes payments to PDVSA-linked entities through accounts held at the US Treasury.

The Government Deal Underneath All of This

This is not a neutral market opening. It rests on an accord between two governments.

US Energy Secretary Chris Wright and interim President Delcy Rodriguez signed it on 2 September 2026.

It covers roughly 65 billion barrels across 17 fields, about a fifth of proven reserves.

The vehicle is a partnership in which the US Defense Department’s strategic capital office holds 35%, at no cost.

Washington also holds a right to buy a fifth of production at cost, free of tax.

The two sides do not agree on the term. American officials describe a hundred years, while Caracas says twenty-five.

Who Is Governing, and With What Mandate

Delcy Rodriguez was sworn in on 5 January 2026, two days after Nicolas Maduro was seized in a US operation.

The supreme court had ordered on 4 January that she assume the interim presidency.

She has no electoral mandate, and no election date has been committed to publicly.

That is the risk lawyers keep flagging. A future elected government could contest the contracts signed now.

Venezuela also left the World Bank arbitration system in 2012 and denounced a Dutch investment treaty in 2008.

Contracts written today therefore rest on the law, and the law can be amended by the same assembly that wrote it.

What the Production Numbers Say

Output ran at 1.201 million barrels a day in August, on OPEC secondary-source figures.

That is essentially flat on July. PDVSA’s own count runs about 100,000 barrels higher, because it includes condensates.

Exports were about 1.17 million barrels a day, which Reuters called almost unchanged.

Bloomberg counted a 28% jump over the same month, using a different window and method.

Note that exports nearly match production. That points to inventory being drawn down, not to a surge in the fields.

Reuters also reported tankers queueing in August, because cargoes are selling faster than ports can load them.

What It Means If You Are Watching From Outside

For readers across the region, this is the largest reordering of Latin American energy in a generation.

It is also, so far, a paper reordering. One non-binding memorandum and one anonymously sourced report.

The test is simple and it is near. Watch for a signed participation contract and a specific Treasury licence.

Until both exist, nothing has been committed and no barrel has moved that was not moving already.

The second test is slower. Whoever governs Venezuela next will decide whether these contracts survive.

What Is Not Yet Known

Exxon has not confirmed anything, and the terms of any return are unreported.

The Continental participation contract has not been signed, and no production target or timeline exists.

Whether the American licences cover performance of these specific deals has not been stated publicly.

Russia’s state oil arm still holds 40% of Petromonagas, and Caracas has publicly defended that title.

How that is resolved is the open question, and it has not been answered by anyone involved.

Frequently Asked Questions

Sources: Continental Resources, the memorandum announcement, CNBC, on the Ayacucho 2 block, Bloomberg, Exxon reported in talks, Cleary Gottlieb, the rewritten hydrocarbons law, Faegre Drinker, the general licences in force, The American Presidency Project, the executive order on oil revenue, Al Jazeera, on the intergovernmental accord, Al Jazeera, Delcy Rodriguez sworn in