TotalEnergies SE (NYSE:TTE) is laying the groundwork for a potential return to Venezuela after signing a memorandum of understanding with the country’s government on September 19. However, no financial or production details of the agreement have been disclosed yet.
The French oil giant had been absent from Venezuela since 2021, when it formally announced its withdrawal from the joint venture Petrocedeno, one of the most important extra-heavy crude oil projects in the Orinoco Belt. At the time, the company claimed that the move was not related to the country’s political situation and that the decision was in line with TotalEnergies’ plans to curb its carbon footprint.
This marks the latest of a flurry of oil deals signed between multinational oil companies and Venezuela’s new government, following the ouster of former president Nicolas Maduro in January. The South American country is sitting on the largest proven crude oil reserves in the world, accounting for roughly 17% of the global total, and President Trump has been pushing for international operators to come in and revive Venezuela’s ageing oil infrastructure.
READ ALSO: Exxon (XOM) Eyes a Return to Venezuela After Nearly Two Decades Away
Eyeing a Venezuelan Oil Windfall:
The deal gives TotalEnergies access to one of the largest hydrocarbon resource bases in the world, potentially providing it with long-term revenue growth. CEO Patrick Pouyanne already stated in January that adding 100,000 or 200,000 barrels per day of production from Venezuela could be feasible.
Venezuela’s evolving oil framework could also provide increased safety to international partners by giving them greater control over field operations, crude exports, and proceeds. This makes any potential new projects more commercially attractive than under the previous operating model. Venezuelan Interim President Delcy Rodriguez also highlighted this at the signing ceremony, saying that the country has established reliable legal conditions for new investments thanks to the hydrocarbons law approved earlier this year.
While there are currently no details available on the deal between Total and Venezuela’s state-owned PDVSA, an official from the Ministry of Hydrocarbons revealed that one of the oil fields included in the agreement is Travi. Unlike the extra-heavy crudes from the prolific Orinoco Belt, Travi produces light crude oil that is sent to local refineries and used as a diluent for extra-heavy crudes. Due to its lower density, higher API gravity, and lower sulfur content, light crude is easier and less costly to refine into high-value products like gasoline, jet fuel, and diesel.
DON’T MISS: Chevron (CVX) Supercharges its Venezuela Bet with More Oil Rigs
The Deal Comes with Big Unknowns:
The immediate bear case is that the latest agreement creates an opportunity rather than earnings, since no details were disclosed on the financial terms, investment amount, and technical specifications during the signing ceremony in Caracas.
A major risk for Total remains the political uncertainty and regulatory risks in Venezuela. The company is considering investing in a country that it already had to leave in 2021, even taking a $1.38 billion write-down. Although the current administration appears more open to foreign investment, Venezuela’s evolving legal and political framework remains largely untested.
There is also an execution risk as Venezuela’s oil infrastructure has suffered from years of underinvestment. Bringing new fields online will require significant drilling, maintenance, and infrastructure spending. Any delays or cost overruns could undermine the project’s economics.
Conclusion:
TotalEnergies’ new agreement with Venezuela opens the door to potentially significant upstream growth, but the lack of production and financial details limits its near-term impact. The opportunity is attractive if the country’s investment framework holds, though political uncertainty and execution risks make the eventual earnings contribution hard to access.
Market Sentiment:
TotalEnergies SE was held by 34 hedge funds in the Insider Monkey database at the end of Q2 2026, up from 30 in the previous quarter. However, while the total number of hedge fund investors increased, their cumulative stake value in TTE declined from around $3 billion in Q1 to almost $1.7 billion at the end of the second quarter.
READ NEXT: Baker Hughes (BKR) Raises 2026 Guidance. But Investors Aren’t Impressed and Bloom Energy (BE) Unveils a New Power Play for the AI Boom
This article is originally published at Insider Monkey.
