Spain’s Repsol wins back control of Venezuelan oil operations

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Repsol is poised to take back operational control of its Venezuelan oil assets and boost production following a deal signed with the South American country’s government.

The Spanish energy group is expected to announce the agreement on Thursday, which will include plans to triple production from its Venezuelan oil operations within three years and establish a “guaranteed” payment system that will avoid previous pitfalls under which Caracas failed to pay up, according to a person with knowledge of the deal.

Repsol struck an agreement with Venezuela in 2023 to continue operating its facilities there. But this lapsed when President Donald Trump revoked Repsol and other western companies’ licence to operate in Venezuela last year as part of US efforts to pressure the Maduro regime.

The deal does not include a specific commitment by the Venezuelan government to pay back about $4.55bn, which Repsol says it is owed for natural gas and oil it was not paid for. But the payment guarantee is intended to provide the company with confidence that it will be paid for any production it supplies to the country in the future.

The agreement, which also includes Venezuela’s state oil company PDVSA, is part of US-backed efforts to rebuild the country’s oil industry following Washington’s capture of former president Nicolás Maduro in January. It follows a deal agreed this week between Chevron and Caracas, which enables the American company to significantly expand operations in the country. 

Venezuela has the world’s largest oil reserves and was a top crude producer in the 1990s, but mismanagement, corruption and US sanctions have caused production to fall to 1mn barrels a day, down from a modern-era high of about 3.5mn b/d.

Trump is pressing western oil companies to invest $100bn in Venezuela as part of efforts to boost global crude supplies and tackle soaring prices caused by the US war in the Middle East. But few companies have announced plans to invest and in January ExxonMobil’s chief executive Darren Woods said Venezuela was currently “uninvestable”.

Since Maduro’s ousting, Washington has begun rolling back “maximum pressure” sanctions imposed during the first Trump administration on Venezuela. On Tuesday, the US Treasury issued a licence allowing financial institutions to deal with Venezuela’s central bank, potentially removing bottlenecks for international oil companies.

Venezuela’s acting president Delcy Rodríguez, who served as Maduro’s deputy, has received Trump’s backing to usher through market-friendly reforms. Her government passed a hydrocarbons reform in January, weakening the state’s control over the sector and lowering the tax burden for private companies. A similar mining reform law was passed by lawmakers last week. 

Repsol is one of the largest foreign investors in Venezuela, where it owns a 40 per cent stake in the Petroquiriquire oil asset with the remainder owned by PDVSA. The resource contains three onshore oilfields, which produce about 45,000 barrels per day. Repsol plans to grow production by 50 per cent within 12 months and triple production within three years.

Repsol is also a partner with Italy’s Eni in the Perla gasfield, an offshore development that supplies gas to the domestic market in Venezuela.

Until March 2025, Repsol had been receiving cargoes of Venezuelan crude from the state as payment for oil and gas supplied for power generation. However, US pressure on Caracas and the withdrawal by Trump of licences to operate in Venezuela halted those payments, boosting the country’s already substantial debts owed to Repsol.

Repsol has been operating in Venezuela since 1993.