ORINOCORP

Venezuela Oil History: A Timeline From 1914 to 2026

Venezuela’s oil history began as an industry on July 31, 1914, when the Zumaque I well in Mene Grande, Zulia, was declared commercially useful at 264 barrels a day. In 1922 the Barroso II blowout put the country on the world map, and by 1929 it was the world’s second-largest producer, behind only the United States. It co-founded OPEC in 1960, nationalized its industry in 1976 and hit its all-time peak in 1998 at about 3.4 million barrels a day. Then came the 2002 strike, the collapse and U.S. sanctions. In 2026 output is around 1.15 million barrels a day and the country is opening to foreign companies again.

Venezuela oil timeline at a glance

Year What happened
1906 The government grants Antonio Aranguren a concession of about 3,000 square miles. Shell buys it in 1913.
1914 Zumaque I, the first commercial well, in Mene Grande.
1922 The Barroso II blowout in Cabimas: about 100,000 barrels a day for nine days.
1929 Second-largest producer in the world, after the U.S.
1943 The Hydrocarbons Law sets a 50-50 split of profits.
1958 Decree of December 20 raises the state’s share to about 60%.
1960 Venezuela co-founds OPEC and creates its first state oil company.
1975-1976 Nationalization and the birth of PDVSA.
1990s The Apertura: foreign partners in the Orinoco Belt.
1998 All-time peak: 3.4 million barrels a day.
2002-2003 Oil strike and the firing of thousands of PDVSA workers.
2004-2007 Higher royalties and taxes, and forced migration of contracts to joint ventures.
2016-2018 Production collapses.
2019 U.S. sanctions on PDVSA.
2021 Recent low: 636,000 barrels a day.
2026 Hydrocarbons law reform, U.S. deal and the start of Junín 5.

1906-1922: from the first concession to the blowout

In 1906 the government granted Antonio Aranguren a concession of about 3,000 square miles for 50 years, renewable. In October 1913 Venezuelan Oil Concessions, a Royal Dutch Shell affiliate, bought it, according to the American Association of Petroleum Geologists’ magazine (AAPG).

On July 31, 1914 the Zumaque I well in Mene Grande was declared commercially useful. Wikipedia calls it the country’s first petroleum field. The Caribbean Petroleum Company drilled it to 135 meters, and it produced 264 barrels a day of 18° API crude. In 1976 it would be the stage for nationalization.

What changed everything was Barroso II, in Cabimas on the shore of Lake Maracaibo. It blew out on December 14, 1922 and was not brought under control until 8:30 a.m. on December 23: nine days of flow. Shell geologist Hans Karl Stauffer estimated 100,000 barrels a day. About 840,000 barrels of heavy oil fouled the lake and its eastern shore, and 350,000 were caught in earthen banks and later shipped to Curaçao, according to AAPG. Per Wikipedia, the blowout made headlines around the world and drew oil companies and workers to Cabimas.

It set off an exploration drive that found Lagunillas (1926), Tía Juana (1928) and Bachaquero (1930). According to the CFR, annual output rose from just over 1 million barrels to 137 million over the 1920s, and by 1929 Venezuela ranked second in the world, behind only the U.S. That is about 375,000 barrels a day (our own math: 137 million divided by 365 days).

1943-1960: the 50-50 split and OPEC

The 1943 Hydrocarbons Law required foreign companies to hand half their oil profits to the state, and government income rose sixfold within five years, per the CFR. A secret U.S. State Department document from January 1959 explains the logic: after royalties (a minimum of 16 2/3%) and taxes, profits were to be shared equally. An unofficial comparison for 1948 to 1957 put the split at 53% for the government and 47% for the companies.

A decree on December 20, 1958 raised taxes. The State Department estimated the government’s share would rise from about 50% to about 60%, and U.S. oil companies complained they had not been consulted.

In 1960 Venezuela co-founded OPEC. The meeting ran from September 10 to 14 in Baghdad, with Iran, Iraq, Kuwait, Saudi Arabia and Venezuela as founding members, and Venezuela’s Juan Pablo Pérez Alfonzo was one of its drivers, according to Wikipedia. That same year Venezuela created its first state oil company and raised the income tax on oil companies to 65% of profits, per the CFR.

1975-1976: nationalization and PDVSA

The Organic Law reserving the hydrocarbons industry and trade to the state is dated August 29, 1975. A decree the next day created PDVSA, and on November 2, 1975 it absorbed the Venezuelan Petroleum Corporation, according to Wikipedia. The actual takeover came on January 1, 1976, when President Carlos Andrés Pérez proclaimed nationalization at the Zumaque I well itself. That is why some sources say 1975 and others 1976: the law and the takeover are two different dates.

PDVSA inherited 13 private concession holders, including Lagoven (formerly Creole, Exxon’s affiliate), Maraven (Shell) and Llanoven (Mobil). By 1978 four operating companies were left, and by 1986 only three: Lagoven, Maraven and Corpoven. From 1982 the company also bought refineries abroad. In 1986 it acquired half of CITGO and, per English Wikipedia, the rest in 1990 (it is being sold today: who owns CITGO).

The CFR adds a key rule: PDVSA could only partner with foreign oil companies if it kept 60% of the venture.

1990-2001: the Apertura and the 1998 peak

PDVSA did not have the money to stop the decline of old fields or to develop the extra-heavy crude of the Orinoco Belt. So from the early 1990s the country launched the Apertura Petrolera (oil opening) and signed contracts with foreign companies. Almost all the majors came in: BP, CNPC, Conoco, Chevron, Eni, Exxon, Petrobras, Repsol, Shell, Statoil and Total, among others, according to the Baker Institute. In 2005 their projects produced 1.1 million barrels a day combined and had added 1.2 million of capacity.

Output peaked in 1998 at 3.4 million barrels a day (Baker Institute). In 2000 it was 2.897 million, per Wikipedia (PDVSA data), and the OPEC series used in our production guide gives 2.891 million.

1999-2013: the strike, the firings and the rewritten contracts

After Hugo Chávez took office in 1999, the state expanded its role in the sector and raised taxes and royalties, per the EIA. In December 2002 a strike against the government largely halted PDVSA’s operations for about two months. The government fired thousands of workers, about 19,000 according to Wikipedia, which cites The Economist and the UN. The EIA concludes that production never recovered to pre-2002 levels and fell almost every year after that, because of the loss of technical staff and because money was diverted to social programs.

The Baker Institute’s chronology of the Apertura contracts:

Year Change
2004 Orinoco Belt royalty: from 1% to 16.67%
2005 Higher income tax
2006 Extraction tax: effective royalty rises to 33.3%
2007 Forced migration to joint ventures

The companies that refused, Exxon and Conoco, were nationalized with compensation at book value, far below market value. The EIA sums up the result: PDVSA had to hold at least 60% of every project. In 2005 Petrocaribe was also born, subsidized oil for countries in the region, per the CFR.

The targets were missed. The official plan expected 5.8 million barrels a day by 2012; actual output was 2.9 million, according to the Baker Institute.

2014-2021: the collapse and sanctions

When oil prices fell in 2014 the economy went into free fall (CFR). Production dropped 755,000 barrels a day between June 2016 and May 2018, per the EIA, and ended 2018 at 1.3 million, according to the Baker Institute. The same report says GDP fell by more than half in five years.

U.S. sanctions arrived when output had already been falling for years. In August 2017 they restricted PDVSA’s access to credit markets (Wikipedia), and in January 2019 they banned transactions with the company, according to the Congressional Research Service (CRS). U.S. imports of Venezuelan crude fell to zero in 2019 and did not return until 2023, under Chevron’s licenses.

Production fell to 636,000 barrels a day in 2021, per OPEC.

2022-2026: the recovery

Year Production (OPEC, barrels a day)
2021 636,000
2022 716,000
2023 783,000
2024 921,000
2025 1,081,000
Sept. 2026 1,150,000

In November 2022 Chevron was allowed to resume limited operations. In October 2023 sanctions on oil and gas were eased for six months, and in April 2024 they were reimposed, per the CFR.

What happens in 2026 can be dated:

What is left of the refining side: Venezuela’s refineries (in Spanish). How much oil is underground: Venezuela’s oil reserves. The company that runs it all: PDVSA explained.

What is not known

More context: why oil matters so much to Venezuela’s economy.