Venezuela crisis

Oil service firms raring to go in Venezuela

Oil service firms raring to go in Venezuela

New York, 2 February (Argus) — The world's top oil service companies are likely to be the early winners of US president Donald Trump's push to get Venezuela's severely degraded energy sector back up and running. While some of the biggest US oil firms have expressed reservations about returning to the country, given the risks involved and past experience of having assets seized, both SLB and Halliburton are confident they could scale up quickly — even if they, too, would need reassurances about the commercial and legal terms on offer. SLB, the largest service contractor, is ready to take advantage of its existing footprint in the country after maintaining a presence there during the US sanctions era. And Halliburton chief executive Jeff Miller, who was previously based in Venezuela, won praise from Trump at a White House meeting of oil executives in January when he said his firm was eager to return. "My phone is ringing off the hook in terms of interest in Halliburton being there," Miller said. Oil service firms have been among this year's standout performers on the stock market, as the US capture of former Venezuelan president Nicolas Maduro — and Trump's subsequent call for oil companies to invest $100bn to rebuild the nation's crippled energy sector — sparked speculation of a boom in demand for their services and equipment. With the shale sector showing signs of fatigue in their home market, the timing of the Venezuelan opportunity is also favourable. Hefty investments would be required to return Venezuela's oil production to the almost 3.5mn b/d seen in the late 1990s, and companies may need security guarantees for their workers and confidence they could make profitable returns before staging a comeback there. But incremental output gains are still possible in the near term and likely to be services-led, according to bank Jefferies, which cited the potential for workovers, reactivations and surface facility repairs. "However, a return to historical production levels would require multi-year investment, technical partnerships and regulatory clarity," it concludes. When oil production in Venezuela was at 2.5mn-3mn b/d, the country was operating 70-80 rigs, according to bank Citigroup estimates. A return to around 75 active rigs could translate into a combined market opportunity for the top four oil service firms of $3bn-3.5bn, Citigroup analyst Scott Gruber says. Blast from the past SLB has been the largest supplier and partner to state-owned PdV in the past. It has a significant number of assets that are ready to be deployed in Venezuela, ranging from drilling services to production and rigs. "We remain confident that with appropriate licensing, safety parameters and compliance measures in place, we can rapidly ramp up activities in support of the oil and gas industry In Venezuela," chief executive officer Olivier Le Peuch says. Halliburton, which first entered Venezuela in 1938 and only left when US sanctions kicked in at the end of the last decade, is also standing by and ready to make a return. "Halliburton knows this market well, and we will grow our business there as soon as commercial and legal terms are resolved, including payment certainty," Miller says. "The early steps are already well under way." The services giant is well-versed in moving equipment all over the world. "There are opportunities for us sooner rather than later to get back to work," Miller says. Baker Hughes is taking a "prudent, long-term" view as the company assesses opportunities in Venezuela, which were worth about $500mn in terms of company revenue back in 2012. Moderate production increases will require "substantial" investment in well integrity, off-grid power generation, as well as equipment replacements and upgrades, chief executive Lorenzo Simonelli says. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.