Venezuela could rebuild its oil sector toward 3.3 million barrels per day, but legal reform, infrastructure investment and institutional changes remain critical, the Oxford Institute for Energy Studies said Monday.
Venezuela entered the second half of 2026 with large oil and gas resources, but weak production, infrastructure and institutions remain key challenges to a lasting recovery.
OIES said legal certainty remains essential, as uncompensated reversion provisions in the January 2026 hydrocarbons law reform could discourage the long-term investment needed to rebuild Venezuela's oil sector.
The institute said future reforms should remove or compensate for those provisions, as thermal recovery, power generation and related infrastructure require long-term investment.
Venezuela should prioritize lower-viscosity Orinoco resources, brownfield projects and conventional-field rehabilitation to generate early production and cash flow before pursuing more capital- and power-intensive thermal recovery.
Venezuela should develop supporting infrastructure and services alongside upstream investment so production growth does not outpace the systems needed to sustain operations.
OIES added Venezuela could technically reach about 3.3 million b/d within 10 to 12 years, but it stressed that the figure reflects long-term potential, not a forecast.
Such growth would require sustained political transition, predictable fiscal terms, private capital and technology, restored infrastructure, reliable electricity and diluent supplies, and stronger institutions, it said.
PDVSA's institutional redesign also remains central, with a leaner structure focused on strategic asset management, contract supervision, geological evaluation, environmental oversight and infrastructure coordination.
The institute said historical US-Venezuela cooperation during the 1940s showed that stronger fiscal terms and international participation could coexist with Venezuelan sovereignty and sustained oil-sector expansion.
In practical terms, the institute called for sustained US support for the democratic transition and multilateral financing for critical electricity rehabilitation, alongside Venezuelan reforms to address reversion risks and reshape PDVSA.
Venezuela's resource base provides the foundation for recovery, but credible institutions, reliable infrastructure, disciplined sequencing and durable investment rules must convert that potential into sustained production over decades, OIES said.