SLB's Venezuela Revival Hinges on Overcoming Equipment Import Challenges

Oilfield services giant SLB is preparing to reactivate up to 15 drilling rigs in Venezuela, a move that could help increase the country's crude production. The company, along with private equity firm Formentera Partners, is working on separate efforts to boost Venezuela's drilling capacity.

SLB expects its 15 rigs in the country to return to service within a year, with as many as four possibly back online by the end of 2026, depending on contracts with producers. The revival comes as Venezuela seeks to rebuild an oil industry that once produced more than 3 million barrels per day.

Despite holding the world's largest proven crude reserves, Venezuela currently has only two active onshore drilling rigs and a production capacity of around 1.25 million bpd. Chevron, one of the most important foreign producers in the country, expects its output from Venezuelan joint ventures to increase by up to 50% by the end of 2028.

However, major obstacles remain, including difficulties importing and transporting specialized equipment, as well as power supply, infrastructure, permits, and contractual protections that could constrain investment. ExxonMobil and ConocoPhillips have also remained cautious about returning, citing the need for stronger investment and contractual protections.