How Venezuelan Oil, Hugo Chávez, And Geopolitics Led To Maduro’s Capture

Venezuela’s oil abundance is concentrated in the Orinoco Belt, where thick, heavy petroleum—as shown here by two workers at the Cerro Negro Refinery in 2004—is the rule. This refinery and the related oil fields of the Cerro Negro Project were seized by the government of Hugo Chávez in 2007.(Photo by Ed Lallo/GETTY IMAGES)

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Venezuela has long played a part in the global history of oil and its geopolitics, and the capture of its former president, Nicolás Maduro, should be viewed in this context. Consider, for example, the 21^st century growth in the country’s reserves. In the 1980s, these stood at around 50 billion barrels, rising to around 75-80 billion by the late 1990s, but then, only a decade later, soaring to over 300 billion, largest in the world. How and why did this happen, and what does it mean now?

First, we need to understand “reserves”. The term is routinely used in media discussions, but it is actually a specific category of evaluated abundance: “proven reserves.” These are defined as: the amount of oil, estimated with reasonable certainty from geological and engineering data, that can be extracted commercially under current economic conditions, using today’s technology (there are other kinds of reserves, but “proven” is the concern of this article).

This definition was originally created in the U.S. during the late 1970s and used by the Securities and Exchange Commission. It was recently updated by industry consensus to include the criteria of commercial extraction, with the goal of better preventing companies (including national oil firms) from exaggerating the abundance they controlled.

You might notice some contingencies in the above definition. “Proven reserves,” though often treated as if carved in granite, are dynamic and changeable. If geological understanding evolves, so does technology and the methodology of reserve determination. Not least, oil prices have rarely stood still and, in Venezuela’s case, play a central part in its reserves story.

How Did Venezuela Come To Have The World’s Largest Proven Reserves?

Venezuela has a long history of oil production. This began in the 1910s, mainly in the Lake Maracaibo area, and then spread to the east in the Monagas Basin, south of Caracas, where surface seeps of oil occurred. Scattered wells further south, in the Orinoco Valley, recovered what was said to be “tar.” By the 1960s, however, geologic analyses showed these were part of an immense body of heavy petroleum, 550 km long and 45 km wide.

Lacking was the technology able to support commercial extraction. The heavy and extra-heavy oil of the Orinoco Belt represents petroleum generated at depth which then migrated over millions of years to shallow levels where waters and bacteria removed its lighter components. What remains, the thick, black, and dense oil, required special techniques to be brought to the surface.

It wasn’t until the 2000s that this happened. Three technologies—horizontal drilling, injection of light hydrocarbon liquids to mobilize the oil, and use of progressive cavity pumps (inserted into a well to force the oil upwards)—were pivotal, first introduced in the 1990s and becoming widespread soon after. Unlike in Alberta, Canada, where oil sands were being developed using steam injection and other thermal methods, Orinoco oil was produced using “cold” methods.

But technology was not the only determining factor. No less important—and in some ways more—was the steadily climbing price of oil. Surging demand, above all from China, was driving prices to record levels, as Beijing launched the country into its massive phase of industrialization and transport modernization.

Investment by oil companies gushed in response. Not only the likes of Exxon, Chevron, and BP, but also dozens of smaller firms, moved to take stakes in the Orinoco. As production expanded, debate continued in the industry about how much of the Orinoco should now be counted as “proven.”

This was soon determined, but not by uninvolved sources and not purely on the basis of the definition given above. In 2007, the Venezuelan government and PDVSA, the latter now owned by the former, declared that the elevated price environment had raised the proven reserve figure from around 75 billion barrels to 100 billion, and as prices continued to climb, so did this official number soar to stratospheric levels.

Not all experts accepted the new reserve figures. Venezuela was hardly an impartial source; nor was OPEC, of which Caracas was a founding member and to which the new numbers were officially reported. Both stood to gain from the resource power granted by a larger portion of world proven reserves.

In 2025, OPEC counted its total reserves at 1.24 trillion barrels, as much as 80% of the world’s total of 1.6-1.7 trillion. Venezuela’s figure of 303 billion accounts for about 17% of this global figure.

Proven Reserves Can And Do Have A Political Dimension

The definition of “proven” was meant to impose caution, even, a degree of conservatism in reserve estimates. Though created in the U.S. in the 1970s, it was adopted in many other parts of the globe due to the influence of the American oil industry and the fact that the U.S. was for the decades the world’s largest oil importer. What it has never been able to preclude, however, is the political dimension to reserves numbers.

In Venezuela’s case this entered the foreground with the Hugo Chávez government. Chávez took power in 2000, launching his “Bolivarian Revolution” to reclaim the nation’s natural wealth for the poor. The 2001 Hydrocarbons Law was his opening salvo, mandating that the state hold a majority stake in all upstream projects. Further changes led to a massive strike by PDVSA employees, including many thousands of geoscientists and engineers, nearly all of whom were fired, many then leaving the country for opportunities elsewhere.

Chávez then moved to elevate reserves of the Orinoco Belt. In 2005, he began Project Magna Reserva, inviting companies from China, Russia, and Brazil to re-evaluate and quantify Orinoco’s oil, then requesting auditors from the U.S. and Canada to hopefully classify a large portion to the “proven” category. The auditors did not wholly comply, though they confirmed a huge resource existed.

But Chávez succeeded anyway. The staggering rise in oil prices to over $100/barrel in the late 2000s provided an opening for PDVSA to claim reserves had climbed into the billions of barrels. The new figures were reported to OPEC, of which Venezuela was a founding member, which accepted them as official. By 2011, these reached 300 billion barrels, where they have remained ever since. While routinely cited today, this figure attracts skepticism by some in the industry, all the more since prices have averaged less than $75 for the past decade and are now in the low $60s.

But the “Bolivarian Revolution” proved disastrous for other reasons. The firing of so many trained people left PDVSA with political loyalists but little expertise to operate as an oil company. At the same time, foreign interest and investment were not much helped when, in 2007, Chávez sent the military to occupy the oil fields, demanding majority control be surrendered to PDVSA. If some companies, like BP and Total acquiesced, others like Exxon and Conoco packed up and left, writing off $billions and filing international arbitration claims that dissuaded many firms from seeking to establish operations in the country.

The overall result was that Chávez and his successor, Nicolás Maduro, continued to use the Orinoco as a cash cow, doing little to maintain it, and so essentially ran a large part of it into the ground over the next decade. Widespread power outages, dilapidated equipment, and a lack of spare parts from absent foreign firms crippled operations. Added to this were U.S. sanctions starting in 2017, restricting exports and financing.

Why The US Decided To Remove Maduro And Take Control

The irony of the Chávez-Maduro era is irrefutable: never has a nation possessed so much oil in number, while producing so little of it in fact. The Magna Reserva succeeded yet proved part of a policy that ensured the vast majority of Venezuela’s resource would remain exactly where Chávez found it—trapped in the heavy silence of the subsurface.

What did this mean for the Trump Administration? In his first term as president, Trump tightened sanctions on Venezuela in an attempt to quash the country’s growing oil exports and alliance regarding China. These exports began in the 2000s at a rate of under 50,000 barrels/day but had risen to more than six times this amount by the time Maduro was in power. Venezuela was drawing on China’s state credit and making deals with its national oil companies, including the China National Petroleum Corporation and Sinopec, to further expand Orinoco production.

However, the combined effect of U.S. sanctions, PDVSA mismanagement, and failing infrastructure led production under Maduro to collapse—between 2016 and 2020, it went from 2.5 million barrels/day to below 500,000 barrels/day. When Trump reduced sanctions in 2025, numbers climbed to just over 1 million bbls/day but no more.

Meanwhile, the alliance with China did not weaken. Maduro continued exports to Chinese refiners, purchased Chinese arms, and even allowed China to construct two satellite tracking facilities in Venezuela, the El Sombrero and Luepa stations, both of which can be remotely accessed by Beijing. Added to all this were Maduro’s bravada responses to Trump’s warnings in the later months of 2025.

In hindsight, in light of what we now know regarding foreign policy under the Trump Administration, the scene was set for a reckoning. But what specific goals did this Administration have in removing Maduro and taking control?

One clear aim was to reduce or terminate China’s growing presence in Venezuela. Another was to end Maduro’s incompetent and wasteful rule over the world’s largest volume of petroleum reserves—a potential global resource in America’s “sphere of influence,” even in its back yard. Halting this oil from being sold to a global rival was a national security matter. The Orinoco should be developed, produced, and exported to American’s own Gulf Coast refineries, particularly those configured to handle heavy and extra-heavy petroleum. This would add to U.S. energy “dominance,” one of Trump’s stated goals, and it would help lower gasoline and diesel prices in the U.S.

Rejuvenating the Orinoco, however, would be a massive project. As other experts have stressed, many billions of dollars are required, and, at minimum, 3-5 years needed before any significant results could be achieved. To bring things back to where they were in 2001, when production stood at 3.2 million barrels/day, might well require 7-10 years unless all above-ground conditions—political, legal, contractual, security-related, and infrastructural—can somehow be solved in less than a year, which is not very unlikely.

There is, too, the problem of trust: Venezuela has proven itself repeatedly over the past half-century to be a geopolitically unreliable place to do business. This is what Exxon’s CEO, Darren Woods, means when he says the country is “uninvestable” for his company. Chevron, however, is there for the long haul, and other firms with a foothold in the Orinoco, such as Eni, Repsol, and TotalEnergies, along with oil-services giants like SLB (former Schlumberger) and Halliburton seem interested. An ending to the story of this gigantic resource has yet to be written.

From the viewpoint of geology and engineering, the knowledge and technology exist to greatly expand production from the Orinoco. Of this, there should be no doubt. Yet, again, this is not enough. There is the small matter of how much oil might actually be commercial.

Ironies of History

The global oil market today is well-supplied. Prices have fallen almost continuously since 2022, from over $100 to around $65. At this level, the greater part of Venezuela’s oil isn’t commercial–which means it can no longer legitimately be counted as “reserves.” By one recent estimate, as much as 90% of the 303-billion-barrel figure is no longer “proven.” There’s no black magic or sleight-of-hand here: these are terms imposed on nature according to human ideas of utility and affordability. It is an old saying in the oil industry that “reserves” only exist in the ground when someone wants to get them out.

History has many ironies, and the current situation regarding Venezuela ranks high. Maduro is gone, and the U.S. has seized control of the globe’s largest oil reserves at a time when the world doesn’t need them and when they no longer really exist