Shell Positioned to Capitalise on Venezuelan Gas Opportunities Following Political Transition

Shell stands to secure billions of dollars in revenue from Venezuelan gas projects following the political transition that saw Donald Trump facilitate the departure of Nicolás Maduro. The British supermajor has long targeted the resource-rich gas fields situated between Venezuela and Trinidad and Tobago, yet progress has been hamstrung by years of United States sanctions.

The Dragon gas field project, located in Venezuelan territorial waters, represents the centrepiece of Shell’s ambitions in the region. Industry analysts estimate the development could generate approximately $500 million in annual revenues over a three-decade operational lifespan, translating to a multi-billion dollar opportunity. The Dragon field contains an estimated 120 billion cubic metres of gas, roughly three times the United Kingdom’s annual consumption. Significantly larger deposits exist in adjacent fields.

Project development has stagnated amid complex negotiations with US regulatory authorities over licensing requirements. Shell is widely expected to intensify its focus on Venezuelan operations following the recent political developments. The incoming US administration has encouraged petroleum companies to invest in Venezuela, specifically to enhance production capacity and modernise deteriorating infrastructure. The president has emphasised a preference for American companies to spearhead these efforts, suggesting Shell may need to identify a US partner to optimise its position.

Ashley Kelty of investment bank Panmure Liberum outlined the probable competitive landscape: “The big winners are going to be the US majors, Chevron in particular because it is already active in Venezuela. The European majors will get locked out of the best stuff but will get invited in afterwards because American companies will want joint ventures to spread the risk, and companies like Shell and BP will be first choice.”

Shell declined to provide commentary on its Venezuelan strategy. BP maintains a more modest regional interest that could be revitalised. The company secured an exploration and production licence for the Manakin-Cocuina field in 2024, though US approvals were subsequently withdrawn in April 2025. BP has been actively lobbying for reinstatement of these permissions.

Petroleum companies have thus far refrained from public commitments to Venezuelan investment amid ongoing uncertainty regarding the country’s trajectory. Chevron, which currently operates under government supervision in Venezuela, remains the sole global supermajor to issue a statement. A company spokesman noted: “Chevron remains focused on the safety and wellbeing of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations.”

Venezuela represents an extraordinary investment proposition. The Latin American nation possesses the world’s largest proven oil reserves yet ranks merely twentieth globally in production output. This stark disparity between resource endowment and extraction capacity underscores the scale of opportunity for international operators.

Whilst the liberalisation of Venezuelan resources benefits Western petroleum companies, it poses an existential challenge to OPEC, the oil producers’ cartel. The organisation, led by Saudi Arabia, seeks to regulate production volumes to optimise pricing for member states, particularly in key markets including Western Europe, the United States, and China.

The commitment to substantially increase Venezuelan production threatens to further erode OPEC’s already diminishing market control and exert downward pressure on crude prices. Market participants are preparing for heightened volatility in global commodity markets as a consequence. Ahmed Khuzaie, a political consultant based in Bahrain, observed: “Of course the Gulf states are worried because that will mean they will have to readjust their margins, which will affect their way of life.”

Greg Newman, chief executive of London-based oil trading firm Onyx Capital, provided a more detailed analysis: “OPEC’s control of global oil supply and demand is already fragile. If the US increases Venezuelan production, this will tip the global markets into surplus, potentially with one to two million barrels a day of excess oil on top of markets that are already in long-term decline. Trump is very likely going to get his desired low oil prices now and even more importantly, give him considerable control over the whole global oil market and its flows.”

Oil prices declined 18 per cent during 2025, signalling OPEC’s waning influence over market dynamics. This marked the steepest annual contraction since the 2020 pandemic. The Organisation of the Petroleum Exporting Countries was established in 1960 with Venezuela among its five founding members, alongside Saudi Arabia, Kuwait, Iran, and Iraq. The organisation now comprises 12 member nations, with an additional 10 countries participating in the OPEC+ alliance, including Russia.

OPEC+ agreed to postpone planned supply increases for the first quarter of 2026 at a meeting held on Sunday, representing an attempt to provide price support in an increasingly challenging market environment.