Venezuela’s oil industry is in ruins. Reviving it won’t be easy

CABIMAS, Venezuela — The pumps that brought prosperity from deep within the earth’s crust are now largely rusted remnants of a storied past.

Buildings that housed a proud workforce are being destroyed, colonized by slum dwellers or boarded up.

Schools, clinics, well-groomed golf courses – amenities once provided by an industry flush with petrodollars – are either gone or overgrown with weeds.

“Our biggest problem is depression and anxiety,” says Manuel Polanco, 74, a former petroleum engineer whose memories of good times only highlight a dystopian present. “We are barely surviving. We have enough money to feed ourselves and get by.”

This is the bleak picture in Venezuela’s Maracaibo Basin, one of the world’s leading sources of oil for much of the last century.

Since last month’s US strike and the arrest of President Nicolás Maduro and his wife, President Trump has vowed to rebuild the country’s moribund oil sector while providing resources and cash to the US. East of Maracaibo lies the Orinoco Belt, home to the world’s largest proven deposits, estimated at more than 300 billion barrels.

But a recent surge in Venezuela’s northwestern Maracaibo region has made many obstacles even more dramatic. Greeting visitors is a grim panorama of non-functioning wells, worn-out pipelines and empty storage tanks, among other signs of decline.

US plans have created serious doubt in a country unaccustomed to good news. But some oilfield veterans predict a return to the glory days.

“I see myself thriving again,” said José Celestino García Petro, a 66-year-old father of eight who said he could never find a steady job after his healthcare company was nationalized by the government years ago. “Rising from the ashes!”

Broken oil platforms and gas flow stations are seen on Lake Maracaibo near the city of Cabimas.

At its peak in the 1970s, Venezuela was pumping about 3.5 million barrels per day. A founding member of the Organization of Petroleum Exporting Countries, it oozed wealth and excess; However, this wealth was mostly transferred to local elites and foreign oil companies, not to the poor majority.

But falling crude oil prices, government mismanagement and U.S. sanctions have left the Venezuelan industry a hollow shell of its former glory.

Last year, Venezuela managed to pump nearly 1 million barrels of oil per day; This accounts for less than 1% of global production. Yet oil was still a lifeline for a nation mired in economic, political and social turmoil for more than a decade, marked by mass immigration, hyperinflation and an almost omnipresent sense of despair.

U.S. Secretary of Energy Chris Wright (left) and Venezuelan interim President Delcy Rodriguez hold a press conference after their meeting at the Miraflores Presidential Palace in Caracas on February 11.

(Julio Urribarri / Anadolu via Getty Images)

U.S. Energy Secretary Chris Wright visited Venezuela last week, meeting with the country’s interim president Delcy Rodríguez and even touring some oil fields. He boasted that he had made “tremendous progress” in revitalizing a business that is now effectively under US rule.

The optimistic statements are clouded by a harsh reality: Experts say it will likely take at least a decade — perhaps $200 billion or more — to restore the country’s battered hydrocarbon infrastructure.

A lot depends on Big Oil, but some executives are cautious. At a meeting at the White House last month, ExxonMobil CEO Darren Woods called Venezuela “uninvestable.”

Along the oil-soaked shores of Lake Maracaibo, actually a massive coastal lagoon fed by both freshwater rivers and the Caribbean, ruins of a once-thriving enterprise stand out like totems of a bygone civilization.

The shoreline is a dismal pile of debris: decrepit pumps, rickety piers, towering cranes and aging pipelines. Heaps of oil pollute the beach. Pollution has destroyed once abundant fish and crab stocks.

“I pray to God every day for things to change for the better,” said Joel José León Santo, 53, who was preparing his fishing boat with three colleagues on a recent morning. “But so far we haven’t seen any improvement. Food is more expensive. Tomorrow’s food depends on today’s catch.”

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1. Much of Venezuela’s oil industry, such as the broken oil pipeline on Lake Maracaibo, is in disrepair. 2. The General Rafael Urdaneta Bridge spans an outlet of Lake Maracaibo and connects the region to the rest of Venezuela.

Although there is no official number, industry observers estimate that fewer than 2,000 wells are operating in the region of approximately 12,000 wells.

“Everything is bad here, it has come to a standstill,” said Mari Camacho, 45, who with her family is among those living with her family in a cluster of abandoned houses in the mangrove-lined town of El Güere on the eastern shore of Lake Maracaibo.

A brick factory that once served oil producers had long ago closed. His four sons went to Colombia, part of the country’s historic migration.

His house sits above a sea of ​​oil, but Camacho says he has had no electricity for six years, since the transformer exploded. Nobody fixed it. Rumors that the legal owners of their home are planning to seize their property worry him and his neighbors.

“I don’t know where to go,” he said.

About 10 miles south is the sweltering city of Cabimas, an iconic location in Venezuela’s oil narrative. It is now a dilapidated, seemingly lost-in-time metropolis where residents sit on porches and observe the erratic progress of cars moving through pothole-riddled streets.

People stand next to a sign that says “Maracaibo” in a park on the shores of Lake Maracaibo.

“Every major company that existed was affiliated with the oil industry,” said Hollister Quintero, 32, a Cabimas native whose grandparents worked for foreign oil companies in the industry’s glory days. “There is only desolation now.”

Without money to finish college, Quintero struggles as a freelance audiovisual producer. She also cares for her aging parents, whose public pension amounts to $2 a month.

Quintero said most young people left the city, while those who remained found work in the informal sector. A common option, although not very lucrative: delivering food orders by bike or motorcycle.

“There aren’t a lot of opportunities,” he said.

A mural in Maracaibo celebrates Venezuela’s oil industry.

For centuries, the area around Lake Maracaibo was known for natural oil seepage from sedimentary rocks to the surface, a phenomenon also seen in areas such as Los Angeles’ La Brea Tar Pits. Native people and Spanish settlers used the viscous goo for medicinal purposes and for waterproofing boats.

But in the mid-19th and early 20th centuries, the dawn of the oil age and the allure of black gold attracted a new crowd: wildcatters and gold hunters from the United States and Europe drawn to a backwater hitherto known for coffee, cocoa and cattle.

It was in Cabimas that more than a century ago, the famous Barroso II began his meteoric rise.

On December 14, 1922, the ground shook in Cabimas, but it was not an earthquake. Operated by Royal Dutch Shell, Barroso II began blasting about 100,000 barrels of oil per day.

Venezuelan oil historian Orlando Méndez wrote: “Suddenly, oil gushed out with a roar from a well 200 feet above the well and spread into the air like a titan’s umbrella.”2022 article For the American Assn. Petroleum Geologists celebrating the centenary of the eruption.

“The villagers flocked out of their homes,” Méndez wrote. “The oil splashed over them like a torrent of black raindrops… Only the bravest hesitantly walked towards the well. They stretched out their hands, and the dark, sticky liquid splashed around.” [on] their palms. ‘¡petroleum!’ they all shouted.”

The gushing didn’t let up for nine days.

The fugitive brought a good blessing. Little attention has been paid to the environmental disaster at Lake Maracaibo, the destination of much of the escaped crude oil.

Petróleos de Venezuela Bajo Grande Refinery on the shores of Lake Maracaibo.

Explorers combing the lakeside soon discovered other, more productive areas. By the late 1920s, Venezuela had become the world’s largest oil exporter.

“Maracaibo was packed with eager foreigners as every boat landing there unloaded an army of oil workers,” Méndez wrote.

In the following years, Venezuela experienced a cycle of boom and bust, but returned to production near record levels of 3 million barrels per day in the late 1990s.

The late President Hugo Chávez, a left-wing populist, splashed money on the Venezuelan masses long kept away from oil as their incomes soared. An opposition-backed general strike in 2002-03 led Chavez to lay off almost 20,000 employees of the state oil firm.

Years later, Chavez nationalized dozens of oil companies, including some US firms. Nationalizations along with layoffs have consolidated state control of the oil sector and experts say are causing lasting damage by draining the country of expertise and investment.

Chavez died in 2013. International oil prices soon fell; Bad news for his chosen successor, Maduro. US sanctions imposed during Trump’s first term worsened the crisis. Most fired oil workers never got their jobs back.

“We were stigmatized, our benefits were taken away, and our opportunity to work in Venezuela was denied,” said Polanco, a petroleum engineer.

An anti-US mural in Maracaibo says: “Venezuela is not a threat, Venezuela is hope.”

Polanco said that after his dismissal, he found work in Colombia, Ecuador and Mexico, but later returned to Cabimas. He has a son in the United States and a son in Mexico.

He and other former oil workers expressed cautious optimism about Trump’s ambitious stimulus plan.

“I would love to go back to the oil industry and have everything be the same as it was 22 years ago,” said Michelle Bello, a 51-year-old father of five who said she and her four siblings were forced out of the state oil company during the liquidation. “Take the politics out of this.”

Young entrepreneur Quintero also welcomes the idea that his hometown could return to its famous era of prosperity. But he is skeptical.

“Of course, I hope that Cabimas can be reborn as an oil center,” Quintero said. “This is a place with so much history and culture. But the harsh reality is: We’re a ghost town now.”

Special correspondent Mogollón reported from Cabimas and Times staff writer McDonnell reported from Mexico City.