A report by Rystad Energy analyzes the long-term investment required to revive Venezuela's oil production, outlining several financial scenarios and prerequisites.

Investment Required for Production Growth

To increase Venezuela's oil production to 3 million barrels per day (bpd) by 2040, a total investment of $183 billion is necessary, averaging $12 billion annually over a 15-year period starting in 2026. This scenario projects output reaching 2 million bpd by 2032. The required capital expenditure is divided into $102 billion for upstream activities and $81 billion for pipelines, upgraders, and other infrastructure. This estimate significantly exceeds a 2019 internal estimate by state-owned PDVSA of $58 billion, due to changes in the US dollar's value and anticipated additional repair needs and cost overruns.

Current Production Context and Maintenance Costs

Venezuela's production has declined sharply from a peak of 3.5 million bpd in the 1970s, averaging about 1.1 million bpd last year, which represents just 1% of global supply. Merely maintaining this current production level of 1.1 million bpd flat for the next 15 years would require an estimated $53 billion in upstream and infrastructure investment. An additional $17 billion in capital expenditure is specifically needed to sustain this output. Without sufficient investment, a base case scenario forecasts a decline of over 300,000 bpd in the next 15 years, which would still require $36 billion in cumulative investment.

Prerequisites and Funding Challenges

A critical prerequisite for achieving 3 million bpd is an estimated $65 billion investment solely to repair, upgrade, and rebuild ageing infrastructure, which is mandatory before considering investments to increase field output. For the growth scenario to be realistic, at least 25% of the total $183 billion (approximately $30-$35 billion) must be committed within the first two years of the investment cycle. The report emphasizes that this level of funding could only be financed by international oil companies, and their investment is contingent upon full confidence in the country's stability and investment climate.

Service Sector Implications

The $183 billion capital expenditure forecast translates to $156 billion in service purchases. The infrastructure-heavy spending requirement means the fabrication and construction segment would be the largest, accounting for $41 billion. Five other service segments—major equipment, materials and metals, maintenance, mechanical/electrical/instrumentation, and logistics/support—each have projected 15-year market sizes exceeding $10 billion, followed by rigs and equipment ($9 billion) and studies and engineering ($8 billion). Major service providers are seen as monitoring opportunities in this potential market.