PDVSA

Caracas, November 11, 2026 (venezuelanalysis.com) – The acting Delcy Rodríguez government and ExxonMobil signed a memorandum of understanding on Monday as the oil giant prepares to return to Venezuela nearly two decades after having its assets nationalized.

“We welcome [ExxonMobil] back, hoping that synergy will develop and produce benefits for Venezuela and the United States,” she said in a televised broadcast.

Rodríguez stated that the “very important” agreement followed “months of negotiations.”

“This return takes place under very favorable conditions, in a context of legal guarantees for foreign investments,” she added. The acting president also saluted US Chargé d’Affaires John Barrett, who attended the ceremony

For his part, Dan Ammann, president of ExxonMobil Upstream Company, expressed confidence that the firm’s “unique capabilities” and Venezuela’s “extraordinary results” would yield “significant benefits for all parties involved.”

ExxonMobil CEO Darren Woods had previously called Venezuela “uninvestable” and demanded industry reforms before the talks leading to the company’s imminent return.

ExxonMobil left Venezuela in the late 2000s after refusing to comply with reforms introduced by the Hugo Chávez government to assert state sovereignty over the oil industry. The Texas-based multinational refused compensation offers and pursued international arbitration after its assets were nationalized. The company received a US $908 million arbitration award from the International Chamber of Commerce, significantly below its demands. It is likewise attempting to enforce a separate $985 million award.

Caracas had likewise denounced ExxonMobil after it spearheaded offshore drilling projects in the territorial waters of the disputed Essequibo Strip.

The Venezuelan government and ExxonMobil have not disclosed the projects under consideration. But reports suggest the company will take over its former projects, light and medium-crude La Ceiba in the Maracaibo Lake Basin and extra-heavy-crude Cerro Negro in the Orinoco Oil Belt, later relaunched as Petromonagas. The oil giant is also linked to Carabobo block oilfields adjacent to the latter. 

According to Petroguía, ExxonMobil is eyeing concession-type “Productive Participation Contracts” and has engaged in negotiations with Russian state-owned company Roszarubezhneft to acquire its 40 percent stake in the Petromonagas joint venture.

Since the January 3 US attacks and kidnapping of President Nicolás Maduro, Venezuelan authorities have enacted a pro-business overhaul of the energy industry in consultation with Washington, while signing dozens of agreements with Western corporations. Chevron, Repsol, and Shell are among the companies to have struck new deals or renegotiated old ones to expand their foothold in the country.

Rodríguez has also radically shifted Caracas’ foreign policy, including reestablishing ties with Israel.

Recent reports have revealed that NewMed Energy, a subsidiary of the multi-billion Delek Group conglomerate and one of Israel’s largest energy firms, is negotiating a 60 per stake in an unnamed Venezuelan “oil-producing company.”

NewMed has an exclusivity window to negotiate with the Venezuelan counterpart until January 1, 2027. The undisclosed firm is said to hold “onshore oil rights” as well as additional “onshore and offshore oil and gas assets.”

Venezuelan legislation imposes a state-owned majority in any joint ventures. However, the recent reforms allow foreign corporations to take over operations and sales in concession-type agreements despite being minority shareholders.

Notwithstanding the opening of the industry to foreign capital under exceedingly favorable conditions, Venezuela’s oil output has stagnated in recent months. The latest monthly OPEC report placed October’s production at 1.158 million barrels per day (bpd) according to secondary sources. The figure is on a par with the previous month’s 1.147 million bpd output.

Venezuelan authorities had pledged to reach 1.3 million bpd before the end of the year.

In addition to overseeing legislative changes and mediating oil agreements, the US has taken control of Venezuela’s export revenues, with Trump officials deciding when and how much of the funds to return to Caracas.

A New York Times article published on Tuesday claimed that, according to a report from auditing firm KPMG, the Trump administration has managed $12 billion of Venezuelan export revenues through the end of September, with nearly all the funds returned to Caracas to be supplied to the private sector via commercial banks.

Traders Vitol and Trafigura, which secure Venezuelan crude below market price before reselling it, have been the biggest depositors into the US Treasury account at Citibank.

However, the total figure contradicts a previous Financial Times investigation that estimated $13 billion of US-controlled Venezuelan funds in the first half of the year alone. Additionally, Venezuelan government advisor Luigi Pisella stated that the Trump administration deducted around $4.7 billion from the revenues to cover the costs of its January 3 military operation.

Edited by Lucas Koerner in Philadelphia, USA.

On October 27, 2026, the US Court of Appeals for the Second Circuit affirmed that the PDVSA 2020 bonds and the pledge of 50.1% of the shares of CITGO Holding are valid under Venezuelan law.

The decision is Petróleos de Venezuela, S.A. v. MUFG Union Bank, N.A., No. 25-2652, slip op. at 51, 60 (2d Cir. Oct. 27, 2026). This is a case that divided Venezuelan public opinion and legal circles. Much of the public debate tracked the nation’s political divide, with defenders of the bonds more commonly associated with the Maduro side and their opponents more commonly associated with the political opposition. Those who challenged the bonds argued that they were invalid because they were not approved by the National Assembly under article 150 of the 1999 Venezuelan Constitution. They were asking the courts to treat the 2020 bonds and the CITGO pledge as void from the start, so the bondholders could not enforce the notes or foreclose on the pledged CITGO shares. But the 2020 bonds did not create a debt out of nothing. They refinanced preexisting PDVSA debt. Paying what is owed should not be controversial; and the law is, or should be, what it is, no matter what political side one supports.

This case was started by a lawsuit brought in the US by PDVSA entities under the ad hoc board appointed by the interim government of Juan Guaidó, and highly promoted by Venezuelan political opponents of Maduro. The problem they faced is that PDVSA had never subjected its past debt transactions to legislative approval, whether under article 126 of the 1961 Venezuelan Constitution or article 150 of the 1999 Venezuelan Constitution. That is a fact, not a matter of opinion.

The 2015 National Assembly rejected the CITGO pledge in September 2016, but did not state that the indenture itself was a national public interest contract under article 150.

There was also no previous case holding that the contracts or indentures governing PDVSA bond issuances were national public interest contracts. The binding decisions of the Constitutional Chamber of the Venezuelan Supreme Court of Justice (TSJ), as the US Court of Appeals read them, pointed in the other direction: national public interest contracts are contracts entered into by the Republic, or competent organs of the National Executive, and do not include contracts entered into by state owned companies in the Decentralized Public Administration, such as PDVSA. There were other TSJ decisions involving the Central Bank and mixed companies (in this case, allowing contracts without the National Assembly’s approval), but none decided that a PDVSA bond issuance or the CITGO pledge was a national public interest contract. 

But the lawyers hired by the interim government of Juan Guaidó argued that these bonds were different because they were secured by 50.1% of the shares of CITGO Holding, an asset of obvious importance to Venezuela. That was the novel step in the argument. There were older cases and legal writings discussing article 150 and public interest contracts, but no preexisting judicial authority had held that a PDVSA debt transaction, or a pledge of CITGO, became a national public interest contract requiring National Assembly approval. The older authorities that PDVSA invoked did not decide that proposition. What was new was not article 150 itself. It was the attempt to apply article 150 to this transaction.

The National Assembly elected in 2015 categorically rejected the CITGO pledge in a September 27, 2016 acuerdo. But that did not state that the indenture itself was a national public interest contract under article 150. That specific conclusion came in October 2019, after the transaction had closed and the controversy had fully developed, when the National Assembly stated that the 2020 Bond indenture violated article 150 because it was a national public interest contract executed with foreign companies without parliamentary authorization. The PDVSA plaintiffs, acting through the ad hoc board recognized in the United States, then submitted expert legal opinions advancing that same position.

There was no preexisting judicial holding applying article 150 to a PDVSA bond issuance or to the CITGO pledge. PDVSA’s historical practice ran the other way, and the courts ultimately rejected that application of article 150 of the Venezuelan Constitution.

The case has been litigated since 2019. The district court in New York initially ruled for the creditors under New York law. After the New York Court of Appeals held in 2024 that Venezuelan law governs the validity of the securities, the Second Circuit vacated that judgment and remanded. On remand, the district court considered additional expert legal submissions and again held that the bonds and collateral were valid, this time under Venezuelan law. The Second Circuit affirmed yesterday.

PDVSA had another argument: even if article 150 did not itself invalidate the bonds, it argued that US courts had to give effect to the National Assembly resolutions under the act of state doctrine, a rule that generally prevents US courts from questioning official sovereign acts carried out by a foreign government within its own territory. The court rejected that argument as well. Even assuming that the resolutions were sovereign acts intended to invalidate the transaction, the relevant transaction and property were outside Venezuela. The bonds, the depository arrangements and the collateral were centered abroad, particularly in New York. The court therefore held that the act of state doctrine did not require a US court to give the resolutions the extraterritorial effect PDVSA sought.

That record also matters when lawyers involved in the case later comment publicly on it. A novel litigation theory should not be described as if it had been settled Venezuelan law all along. It was not. There was no preexisting judicial holding applying article 150 to a PDVSA bond issuance or to the CITGO pledge. PDVSA’s historical practice ran the other way, and the courts ultimately rejected that application of article 150 of the Venezuelan Constitution. That history is relevant to credibility when lawyers or experts later present advocacy developed in litigation as a neutral account of what Venezuelan law clearly required from the beginning. Lawyers who participated in the case or publicly advocated its legal theory should disclose that context when commenting on it. Readers can then decide what weight to give their views.

Creditors may continue trying to collect the CITGO collateral. Whether and when they can actually reach it is a different question.

What does all of this mean in practical terms? It does not mean that the bondholders own CITGO today or can seize it tomorrow. It means that PDVSA lost its central defense to the 2020 bonds and the CITGO pledge. PDVSA cannot avoid those obligations by arguing that the Venezuelan Constitution required prior approval from the National Assembly. The bonds and the collateral are legally valid. The creditors may therefore continue trying to collect. Whether and when they can actually reach the CITGO collateral is a different question involving enforcement proceedings, US sanctions administered by OFAC and the separate Delaware proceedings involving other creditors of Venezuela.

The PDVSA entities may now ask the US Court of Appeals to rehear the case or seek rehearing by the full court, sitting en banc. They may also petition the Supreme Court of the United States for a writ of certiorari. That would be a request for discretionary review, not another appeal as of right. If the judgment stands, the case will return to the district court and the creditors can continue pursuing their contract and enforcement claims. OFAC may still control whether and when a transfer or sale involving the CITGO collateral can occur, and the separate Delaware creditor proceedings remain important.

The political argument over the PDVSA 2020 bonds may continue, but the legal argument is now much narrower. After seven years of litigation, the district court and the court of appeals, applying Venezuelan law, have concluded that the bonds and the collateral are valid. Politics may still affect when creditors get paid. It no longer supplies a persuasive legal basis for saying that the debt or the pledge never validly existed.