OPINION:
The Air France cabin was full but eerily silent. Passengers avoided eye contact. It was September 2019, and I was one of the last business travelers flying into Caracas, Venezuela, before the carrier abandoned the route entirely. Only four international airlines still served Venezuela, and that number would soon shrink further.
The 2½-hour drive from the airport told me everything I needed to know. Empty highways. Endless security checkpoints. An armored SUV with side pockets stuffed with worthless bolivars. At 35, I had never seen a bullet in my life. Now, I was riding in a vehicle built to stop one.
Here is what most investors miss about Venezuela: The same dysfunction that scares away the herd creates an asymmetric opportunity for those willing to look beyond oil.
Granted, Venezuela sits on the world’s largest proven oil reserves: 304 billion barrels, exceeding Saudi Arabia’s. Yet production has collapsed from 3.5 million barrels per day in 1998 to roughly 700,000 barrels today. So every analyst, investment bank and energy major has the same playbook: Wait for sanctions relief, and then pour billions of dollars into upstream infrastructure.
Here’s why they’re wrong.
After years of sanctions-related advisory work, face-to-face meetings with Venezuelan decision-makers and extensive, on-the-ground risk analysis for resource sector investors, I have reached a contrarian conclusion. Venezuela’s window of opportunity exists precisely because of the prevailing pessimism about mega-energy projects, not despite it.
The country doesn’t need another grand vision. It needs pragmatism, now.
Venezuela requires generic medicines, agricultural equipment, consumer goods and reliable internet infrastructure. These sectors face hardly any sanctions exposure and require a fraction of the capital that energy investments demand. More critically, they offer something that billion-dollar oil projects cannot: the ability to rapidly build trust with Venezuelan consumers and institutions.
Consider the strategic sequencing. A midsize firm that delivers agricultural equipment or establishes consumer goods distribution achieves multiple objectives simultaneously. It demonstrates that foreign capital can operate profitably under current conditions. It shows Venezuelan counterparts that transparent international partnerships are possible. It creates a practical track record that de-risks subsequent, larger investments, including, eventually, in energy.
This inverts the conventional wisdom. Rather than waiting for Venezuela to “fix itself” enough to accommodate megaprojects, smaller-scale commercial success in non-sanctioned sectors creates the institutional infrastructure that makes energy investments viable.
For major energy companies, a $20 million investment in refurbishing a 5,000-barrel-per-day oil field doesn’t move the needle. For a specialized midmarket firm, it’s a flagship project that can generate cash flow within months, not decades.
Infrastructure gaps are market opportunities
Existing energy sector analyses correctly identify Venezuela’s deficits: unreliable electricity, degraded ports, dysfunctional airports and antiquated banking systems. These are typically framed as obstacles, yet they are better understood as addressable markets.
Look at it this way: Port deterioration creates opportunities for logistics firms specializing in rapid rehabilitation, and the absence of reliable banking infrastructure has driven widespread adoption of cryptocurrencies. Tether’s USDT stablecoin reportedly settles 80% of official crude oil transactions. This isn’t dysfunction; it’s adaptability that forward-thinking fintech firms should recognize as a market hungry for innovation.
Even security challenges present commercial opportunities. Current reliance on expensive private contractors is unsustainable. Properly structured arrangements with the local security providers (los colectivos) would formalize what already exists in practice while reducing costs.
The trust deficit
The technical and legal obstacles are real, but the fundamental constraint is mutual distrust. Foreign investors don’t trust Venezuelan institutions, and Venezuelans don’t trust that foreign capital won’t evaporate at the first sign of difficulty. This cannot be resolved through sanctions relief announcements or policy white papers. It requires demonstrated, sustained commercial success at a scale where relationships matter and accountability is personal.
You cannot build trust with a billion-dollar, upstream energy project negotiated between boardrooms in Alberta and Caracas. You can do it by delivering reliable agricultural equipment to farmers in Barinas or establishing functional consumer goods supply chains.
First-mover calculation
Smaller, nimble investors definitely have a structural advantage, and bilateral investment treaties can provide meaningful protection for appropriately sized investments. Yes, Venezuela’s dispersed global assets make enforcement challenging, the result of two decades of political battles with successive U.S. administrations. For investments sized correctly, the risk-return parameters may be acceptable.
So the issue isn’t whether Venezuela will eventually attract major energy investment; it will. The real question is whether investors recognize that normalization won’t happen in a vacuum. In my view, it requires the intermediate step of successful, visible, smaller-scale foreign investment to demonstrate that Venezuela is a functioning market.
The paradox
The fastest path to energy sector returns in Venezuela runs through sectors that have nothing to do with energy (agricultural equipment, consumer goods, fintech, internet infrastructure and generic medicines, for example). Those willing to recognize this will have a first-mover advantage in a country desperate for basic services and starved of foreign investment in hitherto unseen but essential sectors.
Those waiting for the energy sector to “be ready” may find the best opportunities have already been claimed by investors who understood that in Venezuela, boring is beautiful — and profitable.
• Maryna Pogibko is a lawyer and the managing director of Amadeus Consultancy.
Correction: A previous version of this column mispelled Maryna Pogibko’s last name.
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