Decolonizing the Venezuelan Subsoil from Transnational Monopoly Interests.
For over a hundred years, Venezuela’s history has been written in “black gold.” From the first sparks of domestic innovation to the suffocating enclaves of foreign monopolies, the story of Venezuelan oil is a saga of a nation struggling to break the chains of energy colonialism.
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Venezuelan Oil Exports Continue As Usual Despite the U.S. Total Blockade
In this installment, we explore the origins of the industry: the national pioneers forgotten by Western history, the arrival of the transnational “predators,” and the first great awakening of the Venezuelan working class.
1878: The “Eureka” Moment of National Sovereignty
The mainstream narrative often claims that Venezuela’s oil industry began when foreign companies arrived to “civilize” the landscape. This is a historical fallacy. The true birth of the industry was 100% Venezuelan.
On October 12, 1878, long before the American corporations dotted the horizon, a group of local entrepreneurs led by Manuel Antonio Pulido founded the Compañía Nacional Minera Petrolia del Táchira at the Hacienda La Alquitrana.
Using primitive but effective technology, they drilled the “Eureka” well. This milestone proved that Venezuelans possessed the ingenuity to manage their own subsoil resources.
🇻🇪 Venezuela es el país con más reservas probadas de petróleo. Su geopolítica se fundamenta en su posición geográfica y sus enormes recursos naturales.
La actividad económica se desarrolla principalmente en la zona norte del país, donde también se concentra el 65% de la… pic.twitter.com/J0VK5kIC1R
— El Orden Mundial (@elOrdenMundial) December 18, 2025
The text reads: “Venezuela is the country with the largest proven oil reserves. Its geopolitics are based on its geographic position and enormous natural resources. Economic activity is concentrated mainly in the northern part of the country, where 65% of the population also lives. Do you think Trump will directly attack Venezuela? Let us know in the comments.”
The Transnational Incursion: Building a “State Within a State”
As the massive potential of Venezuelan basins became clear, the gates were forced open. Under the long, shadow-filled dictatorship of Juan Vicente Gómez, “The Greats”—the world’s most powerful oil companies—descended upon the country.
Companies like Standard Oil (now Exxon), Shell, and Gulf Oil had established a dominant presence. They built enclaves. These were gated communities known as “oil camps,” where foreign managers lived in luxury while Venezuelan workers were subjected to segregated housing and racialized labor hierarchies.
These corporations operated as a “state within a state.” They dictated laws, manipulated land concessions, and extracted billions in wealth while paying the Venezuelan state a pittance in royalties. This era of “energy feudalism” saw the country’s natural wealth being drained to fuel the industrialization of the Global North, leaving Venezuela with environmental scars and systemic poverty.
1936: The Great Strike
Following the death of the dictator Gómez in 1935, the Venezuelan people finally had the space to breathe—and to organize. In 1936, the oil industry became the primary theater of the class struggle.
The Great Oil Strike of 1936 was a watershed moment. For 43 days, thousands of workers across the Zulia and Falcón states laid down their tools. They were demanding dignity in the face of foreign arrogance.
While the government eventually forced the workers back to their posts, the strike was a strategic victory. It sent a clear message to the boardrooms in New York and London: the oil may be under the ground, but the power belongs to the hands that extract it.
1943: The Medina Angarita Reform and the “50/50” Principle
By the 1940s, the Venezuelan State recognized that the old concessionary model was a form of “energy feudalism” that favored only foreign boardrooms. In 1943, under the government of General Isaías Medina Angarita, a landmark Hydrocarbons Law was enacted to fundamentally redefine the relationship between the Nation and “The Greats”.
The crown jewel of this reform was the “50/50” Principle. For the first time, it was stipulated that the total amount of taxes and royalties paid by companies must represent at least half of their net income.
Key achievements of the 1943 Law included:
- Mandatory Refining: Companies were forced to build refineries on national soil, ending the colonial practice of exporting only raw crude.
- Tax Unification: A 30% income tax was introduced alongside a minimum royalty of 16.6%.
- Technical Oversight: The State gained the power to supervise oil operations directly.
This reform became a global gold standard; later inspiring nationalist demands in countries like Saudi Arabia and Kuwait.
1960: OPEC—A Venezuelan Shield Against Global Cartels
For the Global South, the Organization of the Petroleum Exporting Countries (OPEC) was a revolutionary act of decolonization. The intellectual architect behind this was the Venezuelan Minister Juan Pablo Pérez Alfonzo.
Founded in Baghdad in September 1960 by Venezuela, Iran, Iraq, Kuwait, and Saudi Arabia, OPEC’s mission was simple: to stop “The Greats” from unilaterally manipulating oil prices to the detriment of producing nations.
Pérez Alfonzo argued that oil is a non-renewable resource and its price should reflect its true value to ensure the progressive development of the people who own it.
OPEC transformed oil from a corporate commodity into an instrument of state sovereignty. For Venezuela, this leadership positioned the country as a pioneer in international cooperation.
1976: The “Chimerical” Nationalization
On January 1, 1976, President Carlos Andrés Pérez raised the national flag at the Zumaque I well, marking what was officially called “Oil Independence Day”. This act created Petróleos de Venezuela S.A. (PDVSA) as the parent company to oversee the industry.
However, historians often refer to this as an “incomplete” nationalization. While the State legally owned the oil, the 1975 Reservation Law contained the controversial Article 5, which allowed the State to enter into operational agreements with private companies for “technical assistance”.
The “Old” PDVSA that emerged was:
- Technocratic and Elitist: It fostered a “meritocracy” that operated with high technical standards but remained ideologically aligned with Western corporate interests.
- A “Backdoor” for Transnationals: Through marketing and technical contracts, foreign companies maintained significant influence and profited from equipment and assets that were already paid for.
- Disconnected from the People: The industry functioned as a “state within a state,” reinvesting its wealth into its own corporate growth rather than social development.
This era set the stage for the neoliberal “Opening” of the 1990s, where the elites would attempt to hand the industry back to foreign powers entirely.
Así ha saqueado y robado Estados Unidos del ultraderechista Donald Trump un petrolero en las costas de Venezuela. Ataque imperialista con total impunidad. No es ninguna lucha contra el narcotráfico, es una lucha por el control del petróleo. pic.twitter.com/fvhFSSE6IT
— Fonsi Loaiza (@FonsiLoaiza) December 10, 2025
The text reads: “This is how the United States, under the far-right Donald Trump, looted and stole an oil tanker off the coast of Venezuela. An imperialist attack with total impunity. This is not a fight against drug trafficking; it is a fight for control of oil.”
The Oil Opening of the 1990s
Following the nationalization of 1976, the 1990s marked a period known as the Oil Opening. This was a strategic shift aimed at making the state monopoly more flexible by inviting massive private capital—primarily from foreign transnationals—back into the country.
Driven by a financial crisis and the “old” PDVSA’s inability to fund the technology needed for extra-heavy crude, the government initiated three phases of partnership:
- Operational Agreements (1992-1993): Reactivating marginal or inactive fields.
- Strategic Partnerships (1993-1995): Developing the massive reserves of the Orinoco Oil Belt.
- Shared Profits (1996): Exploring new high-risk areas.
While this period attracted giants like ExxonMobil, BP, and Chevron, it sparked intense controversy.
2001–2007: The Renationalization and the Organic Law
The rise of the Bolivarian Revolution, with President Hugo Chavez brought a radical reorganization of the industry to reverse the “Oil Opening”. The Organic Hydrocarbons Law of 2001 (and its 2006 reform) served as the legal shield to regain state control.
The key pillars of this Renationalization included:
- The 51% Rule: All primary activities must be carried out by “Mixed Enterprises” where the State maintains at least 51% shareholding and real operational control.
- Royalty Increase: The extraction tax was raised from as low as 1% during the Opening to a standard 30%, ensuring the Nation receives income from the very first barrel extracted.
- Ending PDVSA Autonomy: The state-owned company was subordinated to the Ministry of Energy and Petroleum to align oil revenue with social investment and national development.
- Jurisdictional Sovereignty: All legal disputes must now be settled in Venezuelan courts rather than international tribunals that favored transnationals.
"En Venezuela nos quitaron nuestra tierra, los derechos petroleros, todo lo que teníamos allí, nos quitaron nuestro petróleo, teníamos mucho petróleo allí, expulsaron a nuestras empresas petroleras y las queremos de vuelta allí".
El genocida Trump, con una retórica colonial… pic.twitter.com/SFWwNYkkYB
— Daniel Mayakovski (@DaniMayakovski) December 18, 2025
The text reads: “In Venezuela, they took our land, our oil rights, everything we had there. They took our oil; we had a lot of oil there. They expelled our oil companies, and we want them back.” The genocidal Trump, with his repugnant colonial rhetoric, claimed Venezuela’s oil and energy infrastructure as his own, demanding to plunder its resources in a surreal manner. The desperation of the empire forces it to remove its mask and openly admit that they are just pirates who plunder countries to fill their pockets.
The Modern Siege: Sanctions and the “Naval Blockade”
Since 2017, the Venezuelan oil industry has faced what experts describe as a “structural enclosure” through unilateral sanctions imposed by the U.S.. This strategy shifted from targeting individuals to a total sectoral blockade aimed at the financial and operational collapse of PDVSA.
The impact has been multifaceted:
- Financial Suffocation: Executive orders in 2017 and 2019 prohibited debt renegotiation and led to the confiscation of CITGO, Venezuela’s strategic refining arm in the U.S..
- The “Naval Blockade”: Washington has designated tankers, shipowners, and even individual captains on “blacklists” to prevent Venezuelan crude from reaching global markets.
- Operational Deterioration: Prohibition on importing spare parts and diluents caused production to plummet from 1.9 million barrels per day in 2017 to historic lows near 350,000 in 2020.
- Forced Discounts: To bypass the blockade, Venezuela must sell its oil on the “gray market” with discounts of 20% to 30%, while facing exorbitant freight and insurance costs.
By 2025, the pressure intensified with the revocation of licenses (such as Chevron’s General License 41) and the final liquidation phase of CITGO assets, representing a modern attempt at “recolonization” through energy collapse.
A Century of Resistance
The history of Venezuelan oil is not merely a timeline of extraction, but a profound narrative of a nation’s quest for true independence.
From the domestic ingenuity of Petrolia del Táchira in 1878 to the visionary founding of OPEC in 1960, Venezuela has consistently challenged the logic of energy colonialism.
However, as the events of the 21st century show, sovereignty is a territory that must be defended daily. The transition from the neoliberal “Opening” of the 1990s back to a state-controlled model demonstrated the high stakes of oil revenue.
The subsequent “structural enclosure” through sanctions and naval blockades serves as a stark reminder that imperial interests will use every tool—from financial sabotage to the seizure of oil ships—to regain control over the world’s largest oil reserves.
Sources: teleSUR – Venezuelanalysis – Misión Verdad – New York Times – Alí Rodríguez Araque – PDVSA TV – Organic Hydrocarbons Law 2001
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