US and Venezuela audit secret oil contracts from Maduro era

The Venezuelan government and the US are conducting a thorough review of dozens of clandestine oil contracts signed during the tenure of Nicolas Maduro, who was abducted in January.

According to a report by Bloomberg, these agreements were structured as a mechanism to bypass US sanctions and finance the state, encompassing various oil fields within the Latin American nation.

Sources speaking on the condition of anonymity, as they were not authorized to discuss confidential matters, stated that these “productive participation agreements” allowed investors to extract and trade crude oil while concealing their identities to avoid economic retaliation from the US.

The contracts further permitted the government to partner with private entities despite legal restrictions prohibiting non-state actors from conducting oil sales.

Currently, under pressure from the Trump administration, the Venezuelan government is auditing the firms involved while US authorities scrutinize export documentation.

These investigations could impede the recovery of the Venezuelan oil sector, particularly if other companies become hesitant to sign new drilling agreements.

Juan Fernández, a former executive at the state oil company PDVSA and an advisor on oil policy to US-backed opposition leader Maria Corina Machado, stated: “There are many concerns regarding how these contracts were awarded. However, if they are currently producing oil, we need that oil. Therefore, we must balance how we address this matter.”

It remains unclear whether Venezuela will resist US “requests.” Only days after interim President Delcy Rodriguez called for “respect” regarding agreements made under the Maduro administration, PDVSA announced it had signed supply contracts with companies trading crude oil and refined products to the US.

PDVSA has not released the official list of companies holding contracts signed before Maduro was abducted by US forces on January 3.

Rodriguez noted that there are a total of 31 such agreements. Documents reviewed by Bloomberg indicate that only a few are actively extracting and trading oil. As of mid-February, eight of these produced an average of 210,000 barrels per day.

Most of the contracts cover the productive Lake Maracaibo region and parts of the Orinoco Belt.

These contracts were initiated by PDVSA to fill the void left by Western producers whose assets were seized during nationalization campaigns, or who were forced to depart due to US pressure.

The war in Iran appears to have underscored the geopolitical value of oil production in Latin America, which remains independent of trade routes passing through conflict zones and maintains proximity to both Europe and the US.

Venezuela is uniquely positioned in the region, possessing numerous underdeveloped oil fields capable of sustaining production growth over the coming decade.

Most other crude oil producers in the region face production declines or will reach peak output by the mid-2030s unless significant new discoveries are made.

Theodore Kahn, a director at Control Risks in Bogotá, stated: “Venezuelan heavy crude, which can feed US Gulf Coast refineries, is becoming increasingly strategic and valuable. Midterm elections are approaching, and Trump does not want to see rising gasoline prices in the US.”

Also currently unclear is the future of joint ventures with Russia and China, which the Trump administration is seeking to extract from Venezuela.