Venezuela holds some of the largest proven oil reserves in the world, but the country's oil infrastructure is in deep decline, limiting production and complicating any near-term recovery, according to PDVSA company documents and satellite analysis.
Estimates to restore infrastructure to peak production levels range from $58 billion to more than $100 billion, with pipeline upgrades alone costing billions.
Internal state-run oil company documents have warned that major pipeline systems have not been updated in decades.
At the Carabobo field in the Orinoco Belt, once expected to produce 325,000 barrels per day, output is now running roughly one-third below internal targets, according to projections cited by the Financial Times.
The field suffers from a lack of drilling rigs, aging equipment, and the fact that only one heavy crude upgrader remains fully operational, a critical bottleneck for processing Venezuela's tar-like oil.
Satellite analysis by energy intelligence firm Kayrros shows widespread physical deterioration across Venezuela's oil network.
Corroded tanks, unfinished storage facilities, idle terminals, and degraded refineries are common to the country's infrastructure.
Roughly one-third of national storage capacity is estimated to be inactive due to disrepair, refinery shutdowns, and declining output.
Key facilities illustrate the scale of the problem.
Storage tanks at Puerto La Cruz have sat unfinished for years. At Bajo Grande and Puerto Miranda, corrosion and sludge buildup have taken numerous tanks out of service.
The Amuay and Cardón refineries have reportedly operated at less than 20% capacity, functioning more as storage hubs than processing centers after fires and power outages halted operations.
The deterioration did not begin recently. Former PDVSA engineers say the decline accelerated in the early 2000s following nationalizations, loss of technical expertise, and diversion of oil revenues into government programs.
U.S. sanctions later restricted access to capital, equipment, and export markets, further constraining operations. Corruption and mismanagement became entrenched, while skilled workers steadily left the country.
Venezuela's infrastructure has suffered chronic neglect, resulting in blackouts, water system failures, and damaged roads.
A nationwide blackout in 2019 crippled oil operations in the Orinoco region and caused permanent production losses.
Analysts say limited production gains are possible in the short term, but a full recovery would require massive investment, legal stability, and the return of experienced engineers.
Without those conditions, Venezuela's oil infrastructure remains a fundamental obstacle to any sustained rebound.
A new report from the Energy Network Media Group indicates Venezuela's oil decline has two causes, and only one can be fixed quickly.
The more serious damage began in the mid-2000s, when the government took control of oil projects and forced out foreign companies.
PDVSA was left with aging facilities but lacked the money, expertise, and management needed to maintain them. Production fell years before U.S. sanctions were imposed.
Sanctions added a second blow by blocking exports and cutting off access to materials needed to move and process Venezuela's heavy crude oil.
Those measures caused wells to shut down for commercial reasons. Analysts say some of that lost output could return if restrictions ease, but rebuilding the industry itself will take years.
The Trump administration is now managing Venezuelan affairs with the assistance of national leaders not involved in narco-terrorism — the issue that led to the capture of former Venezuelan leader Nicolas Maduro, who now faces federal indictments and is being detained in the U.S.
Jim Mishler ✉
Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
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