Venezuela pitches new upstream tax terms to investors in London

Industry leaders used a London showcase to promote Venezuela's new hydrocarbons framework as a way to revive upstream investment. The overhaul lowers combined government take to as little as 20% on greenfield projects and comes as the country aims to raise output toward 2026.

Why it matters: - Venezuela is trying to reset its image with global oil investors after years of policy and production decline. - The new fiscal framework could materially change project economics for greenfield and heavy-oil developments. - Rising production and simpler tax terms are intended to draw back capital needed for near-term growth.

What happened: - Industry leaders at the Venezuela Energy Week London Industry Showcase on Thursday presented Venezuela's new hydrocarbons framework to international investors and industry stakeholders in London. - The showcase framed the regulations as a step toward restoring Venezuela's competitiveness as an upstream investment destination. - The event is the first in a series of international engagements ahead of Venezuela Energy Week 2026 in Caracas from October 26-29. - The Caracas event will bring together government officials, international operators, investors and technology providers.

The details: - The implementing regulations were signed into force in July. - The framework sets a combined government take as low as 20% on greenfield upstream projects. - The system replaces more than 20 legacy taxes with a streamlined fiscal structure. - The new terms pair a variable royalty with the Integrated Hydrocarbons Tax. - Combined rates are 20% for greenfield developments and 25% for extra-heavy and diluted crude projects. - The windfall tax and shadow tax were repealed. - Industry analysis presented at the showcase said the reforms place Venezuela among Latin America's most competitive upstream jurisdictions. - Carlos Bellorin, executive vice president of macro analysis at Welligence Energy Analytics, said his firm modeled expansion under the new framework and found Venezuela's terms highly competitive globally. - Bellorin said production has recovered to about 1.2 million barrels per day. - Welligence forecasts output at 1.4 million to 1.6 million barrels per day by the end of 2026. - Bellorin said, “Below two million barrels per day it's an OpEx game.” - Bellorin added, “After that, you need the big companies to come in.” - Juan Carlos Andrade, CEO of Araya Energy Group and director and legal counsel at the Venezuelan Petroleum Chamber, said the overhaul removed constraints that previously forced operators to use contractual workarounds. - Andrade said operators now can trade their own barrels, manage their own cash flow and develop on-site power generation. - Andrade projected Productive Participation Contracts could deliver 250,000 to 500,000 barrels per day. - Andrade said mixed operating companies could contribute a similar volume. - Those two contract structures are expected to anchor Venezuela's near-term production growth. - More information on the event is available through Venezuela Energy Week's LinkedIn showcase.

Between the lines: - The event's message was aimed at investors who care most about fiscal simplicity, project control and the ability to monetize production efficiently. - Repealing taxes seen as obstacles to high-capex projects signals a deliberate effort to make larger developments easier to finance. - The emphasis on contract structures and operating flexibility suggests Venezuela is trying to compete not just on reserves, but on how much control investors can retain.

What's next: - The international roadshow will continue ahead of the Caracas conference in late October. - Venezuela Energy Week 2026 is expected to further detail the country's regulatory framework, upstream opportunities and long-term energy strategy. - Production targets and investor response will be watched closely as the new rules move from presentation to execution.

The bottom line: - Venezuela is betting that lower taxes, clearer rules and improving output can reopen the door to upstream capital.