Continental Resources signed a memorandum of understanding with PDVSA on September 16 for the Ayacucho 2 block in Venezuela’s Orinoco Belt: 126,000 acres, an estimated 30 billion barrels of resource in place, full operating control once a production contract is finalized. It landed two days after Washington rewrote, for the fourth time since January, the sanctions authorization U.S. companies operate under in Venezuela. Chevron had already announced a five-year, $7 billion expansion. The White House had already claimed, weeks earlier, that a separate U.S.-backed entity received 100-year concessions on 17 oil fields holding 65 billion barrels. Read quickly, this is the story: American energy is back in Venezuela, sanctions relief is real, the door is open. Read the instruments underneath the headlines, and a different story shows up — one about a lease, not a sale, and about who still holds the key.
What that reading gets right
The optimism isn’t manufactured. Since Washington turned from sanctions containment to what the Atlantic Council’s David Goldwyn calls controlled restoration, four general licenses have expanded, in eight months, what U.S. companies can legally do with Petróleos de Venezuela, S.A. (PDVSA, Venezuela’s state oil company), from lifting and exporting Venezuelan crude to now letting blocked PDVSA officials sign contracts in their official capacity. Chevron’s $7 billion is committed capital against a plan to roughly double output to 600,000 barrels a day. Continental’s CEO didn’t call Ayacucho 2 a hedge; he called it an extraordinary addition to the company’s portfolio. If you’re running government affairs for a company with Gulf Coast refining capacity built for heavy Venezuelan crude, reading this as a green light is a reasonable first instinct.
What it misses
Here’s the gap. PDVSA itself was never desanctioned; only interim president Delcy Rodríguez was, back in April. Every one of the Chevron and Continental deals runs through General License 52C, issued September 14 and already the fourth iteration since January’s GL 46. A general license is not a lifted sanctions program. It’s a standing permission slip that a single administration action can revoke, and 52C’s own fine print (mandatory dispute resolution in the U.S., U.K., France, or Singapore, a new bar on anything touching Citgo’s governance) reads like a document written by lawyers who expect to need it in court.
Venezuela’s own law compounds the problem. The reformed Ley Orgánica de Hidrocarburos (Organic Hydrocarbons Law), passed in January, lets PDVSA grant private companies only production-participation contracts, known locally as Contratos de Participación Productiva. It does not authorize concessions of any length. That makes the White House’s August 31 fact sheet, crediting North American Blue Energy Partners with 100-year concessions on 17 fields and 65 billion barrels, hard to square with the statute Caracas itself just passed. CSIS analysts have said so directly: the interim authorities cannot grant what the fact sheet says they granted, and a contract of that scale may also need approval from a National Assembly that hasn’t voted on it. Continental’s structure, an MOU heading toward a production-participation contract, is the legally cautious version of this story. NABEP’s is the one every compliance desk should be reading twice.
Then there’s the line of people already waiting to get paid. Venezuelan assets carry roughly $20 billion in enforced arbitration judgments. ConocoPhillips alone holds $8.5 billion, the largest single claim, with Crystallex, Rusoro, and ExxonMobil’s affiliates behind it. Citgo’s parent was sold to an Elliott Management affiliate for $5.892 billion in cash plus $2.125 billion in transition-service agreements, approved by a Delaware court in November and still waiting on OFAC, antitrust, and CFIUS sign-off. That sale resolves something like a quarter of the outstanding claims. Every dollar that starts moving out of a new Venezuelan joint venture is moving through a jurisdiction where creditors have already shown, in court, exactly how to attach Venezuelan-linked assets.
What this means for your operation
None of this argues for staying out. It argues for reading the signal correctly. First, treat every MOU as a negotiating position, not a contract: the date that matters is when a definitive production-participation contract gets signed, and where its dispute-resolution seat sits. Second, get independent counsel on Article 150 exposure before any structure starts to resemble a concession rather than a production-sharing agreement; NABEP is now the test case the rest of the market gets to watch for free. Third, model license revocability into the capital plan the way you’d model permit-renewal risk, not a one-time approval. Fourth, watch the creditor queue as closely as the sanctions list — a new Venezuelan revenue stream inherits the same courtroom that ConocoPhillips and Exxon have already used, successfully, to get paid.
And watch ExxonMobil specifically. Five of its affiliates spent nearly two decades enforcing arbitration awards against Venezuela over the 2007 Cerro Negro nationalization, most recently confirmed at $985.5 million by a U.S. federal judge. Bloomberg Línea reports Exxon is negotiating a return. It hasn’t signed anything close to Chevron’s five-year commitment or Continental’s MOU. The company that knows Venezuelan expropriation risk best in the world is moving slower than the ones that don’t, and that’s worth more to your risk committee than another signing ceremony.
The next dates worth watching: Continental and PDVSA’s push toward a definitive contract “in the coming weeks,” the Citgo sale’s OFAC and CFIUS clearance sometime in 2026, and whichever comes first — Exxon signing, or the National Assembly weighing in on NABEP.
The headlines are measuring who signed first. The better question is who’s still reading the fine print.
Further reading: