Venezuela after US arrest of Maduro: Sanctions, Risk and Opportunities

The arrest and arraignment of President Nicolás Maduro in the United States (US) mark a pivotal moment for Venezuela’s legal and commercial trajectory, with prospective implications for the oil and gas sector and knock-on effects across trade, finance, infrastructure, and consumer industries. Expert estimates suggest USD 15–20 billion would be required just to recover a portion of historical capacity—pointing to multi-year, capital-intensive rehabilitation programs and the need for robust risk allocation.

Venezuela possesses the world’s largest proved oil reserves, largely in the Orinoco Belt (extra-heavy crude). Unlocking those reserves depends on credible governance, sanctions calibration, a contractual framework that balances state take with investor economics and durability across price cycles and a legal framework where the rule of law controls.

Sanctions and trade compliance

The U.S. sanctions program—anchored in multiple Executive Orders and administered by OFAC—continues to restrict most dealings with the Government of Venezuela and PDVSA (Venezuela’s state-owned oil company), historically channeling activity through general and specific licenses. To our knowledge, there are no formal changes to date, but we expect developments in this space in the near future, as US authorities have stated that "The United States is selectively rolling back sanctions to enable the transport and sale of Venezuelan crude and oil products to global markets". Any path to re-engagement is likely to proceed via expanded licensing or phased revocation of restrictive measures, and historic transitions (e.g., Libya) suggest relief, if it comes, may be gradual and conditions-based. Companies should prepare license-ready dossiers and decision trees that contemplate partial relief alongside persistent constraints.

Although more limited in scope, the European Union (EU) also maintains sanctions against Venezuela (Council Decision (CFSP) 2017/2074 of 13 November 2017) restricting the export to Venezuela of military, internal repression and some telecommunications items. The EU has also imposed travel bans and asset freezes on designated individuals, including the current acting president, Delcy Rodríguez. To date, there are no indications that changes are forthcoming.

Investment disputes and expropriation dynamics

Venezuela has long been a respondent in investor-state arbitration cases alleging expropriation, discrimination and treaty-standard breaches. A more functional state could shift the enforcement calculus and encourage both new and revived claims, including by investors already expropriated in Venezuela. Some market participants are evaluating whether a structured claims mechanism could emerge—potentially via a multilateral model or a role for the U.S. Foreign Claims Settlement Commission—which would influence forum selection, valuation and settlement strategy. In-house teams should update damages models, assess enforcement options against attachable assets, and preserve evidence in anticipation of increased case activity.

Sovereign debt: recognition, priorities and restructuring

Recognition—who is the legitimate government empowered to bind the state—will be central to both sovereign and PDVSA workouts and to the validity of waivers, consents and exchange mechanics. Expect continued litigation around judgments, attachments and priority contests, especially where assets intersect with the energy value chain (receivables, export proceeds). Any credible restructuring must be sanctions-compliant, anchored in clear governing law and immunities strategy, and supported by early creditor coordination across instruments and venues.

Contracting and structuring for new investment

If sanctions relief opens space for new projects, structure first. Treaty-optimized corporate nationality can secure investment treaty coverage and access to international arbitration; stabilization and change-of-law protections, force majeure and robust dispute resolution should be engineered upfront; and political risk insurance can materially rebalance risk-return. These protections are particularly acute in upstream and midstream oil and gas, but the same logic applies to power, renewables, infrastructure, mining, industrials, consumer, and logistics with Venezuela touchpoints. Boards should receive regular briefings, adopt clear risk-appetite statements, and tighten internal controls tailored to this jurisdiction.

What to watch

• OFAC actions on Venezuela and licensing practice, including any energy-specific authorizations or humanitarian/commercial corridors with energy implications.
• Domestic steps on interim governance and election timelines, which will drive recognition, contract capacity and debt processes. 
• Signals on claims frameworks or award enforceability, including multilateral or administrative pathways.
• Early creditor coordination around sovereign/PDVSA debt and court activity on attachments affecting energy cash flows.

Practical next steps for in-house teams

• Map current and contemplated Venezuela touchpoints; freeze or ring-fence activity pending a sanctions decision tree aligned to OFAC guidance.
• Prepare license-ready files (facts, counterparties, controls) for targeted OFAC submissions.
• Refresh legacy claims: update damages models, preserve evidence, and identify attachable assets by jurisdiction.
• For new investment, design treaty-optimized holding structures and term sheets with stabilization, change-of-law and robust dispute resolution. 
• Track sovereign/PDVSA developments; evaluate exposure to judgments, liens and receivables in your value chain; coordinate with finance on restructuring scenarios. 
• Brief the board regularly on sanctions status, recognition risk and execution pathways, with clear risk appetite statements and enhanced internal controls.

For more information, please contact our specialists.