Conoco Says Venezuela Bid to Woo Oil Firms Falls Short

Why It Matters

The inability to secure investor‑friendly terms threatens Venezuela’s oil comeback and limits U.S. strategic access to South American energy resources.

Key Takeaways

• Venezuela's new oil law still allows up to 30% royalties.
• ConocoPhillips CEO says 95% state take deters investment.
• Proposed contracts favor government on arbitration and termination.
• US Interior Secretary urges Venezuela to improve terms for foreign capital.
• $12 billion of Conoco assets were nationalized in 2007.

Pulse Analysis

Venezuela’s oil industry, once a cornerstone of its economy, is at a crossroads after the United States intervened to remove former President Nicolás Maduro. The Trump administration’s strategy hinges on reopening the country’s fields to multinational drillers, hoping to revive output that fell below 1 million barrels per day. However, the interim government led by Delcy Rodriguez has offered a revised hydrocarbon law that still permits the state to claim up to 30 percent royalties and a 15 percent tax burden, figures that fall short of global investment benchmarks.

Industry leaders, including ConocoPhillips CEO Ryan Lance, argue that a 95 percent government take is a deal‑breaker for any serious capital commitment. The proposed contract, circulated by Petróleos de Venezuela SA, leans heavily toward state control in arbitration, tax assessments and contract termination clauses, echoing the terms that led to the 2007 expropriation of roughly $12 billion in Conoco assets. Investors fear that without clearer protections and a lower fiscal burden, the risk‑adjusted return on Venezuelan projects will remain unattractive compared with opportunities in the Gulf of Mexico or offshore Brazil.

U.S. Interior Secretary Doug Burgum has signaled optimism, urging Rodriguez to craft terms that can attract “competitive” capital. If the Venezuelan government refuses to lower its fiscal demands, major oil firms may walk away, pressuring Caracas to renegotiate or risk prolonged production decline. Such a stalemate could keep global oil supply tight, supporting higher prices and reinforcing U.S. reliance on imports from more stable regions. Conversely, a revised, investor‑friendly framework could unlock billions in upstream spending, boost employment, and provide a strategic foothold for American energy firms in South America.