During Thursday’s Venezuela Energy Week London Industry Showcase, sector leaders emphasized that the country’s recently enacted hydrocarbons framework represents a significant advance in restoring its appeal as a destination for upstream investment. They cited streamlined fiscal terms, enhanced operational flexibility, and climbing production as primary factors fueling renewed interest from investors.
Presented to global investors and industry players in London, the nation’s regulatory framework delivers a combined government take as low as 20% on greenfield upstream projects via a simplified tax system that replaces over 20 legacy levies. Insights shared during the showcase indicate that these reforms put Venezuela among Latin America’s most competitive upstream jurisdictions, according to industry analysis.
The updated terms, established in implementing regulations that took effect in July, combine a variable royalty with the Integrated Hydrocarbons Tax. This results in combined rates of 20% for greenfield developments and 25% for extra-heavy and diluted crude projects. The windfall tax and shadow tax—both previously cited by investors as obstacles to high-capital-expenditure projects—have been eliminated.
Carlos Bellorin, Executive Vice President of Macro Analysis at Welligence Energy Analytics, stated that his firm has modeled expansion under the new framework and found Venezuela’s terms highly competitive globally. Production has recovered to roughly 1.2 million barrels per day, he noted, with Welligence anticipating output of between 1.4 million and 1.6 million barrels per day by late 2026.
“Below two million barrels per day it’s an OpEx game,” Bellorin said. “After that, you need the big companies to come in.”
Juan Carlos Andrade, CEO of Araya Energy Group and Director and Legal Counsel at the Venezuelan Petroleum Chamber, said the regulatory overhaul has removed barriers that previously forced operators to address shortcomings through contractual workarounds. Operators now have the ability to trade their own barrels, manage their own cash flow, and develop on-site power generation.
“This is no longer a theory,” Andrade said. “What exists is an opportunity.”
Andrade projected that Productive Participation Contracts could yield between 250,000 and 500,000 barrels per day, with mixed operating companies contributing a similar volume. Together, these two contract structures are expected to underpin Venezuela’s near-term production growth.
The London Industry Showcase is the first in a series of international events leading up to Venezuela Energy Week 2026, scheduled for October 26-29 in Caracas. The gathering will bring together government officials, international operators, investors, and technology providers to examine the country’s evolving regulatory framework, upstream opportunities, and long-term energy development strategy.
Supporting Venezuela’s Earthquake Recovery
Our thoughts are with the people and communities affected by the recent earthquakes in Venezuela. As the country begins the long process of recovery, we encourage members of the global energy community to support relief and reconstruction efforts through the CAF Recovery and Reconstruction Fund for Venezuela, which channels contributions from individuals, companies and organizations to emergency assistance, essential services and long-term rebuilding efforts.
To learn more or make a contribution, please visit the CAF Recovery and Reconstruction Fund for Venezuela.
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