This is the story and enduring legacy of Venezuela’s first oil discoveries and early petroleum development, which began in the early 20th century and went on to reshape global energy history.
The birth of Venezuela’s oil industry is traced to Well Zumaque I, also known as MG-1, which was drilled on July 31, 1914, by the Caribbean Petroleum Company, a subsidiary of Royal Dutch Shell, at Mene Grande in the state of Zulia. The well reached a depth of just 135 meters, yet produced 264 barrels of oil per day, officially marking the beginning of Venezuela’s petroleum era.
Venezuela quickly captured worldwide attention:
- Royal Dutch Shell, Standard Oil (later ExxonMobil), and other international majors launched large-scale exploration programs.
- The legendary Barroso II gusher in 1922, which erupted uncontrollably for nine days, confirmed the country’s extraordinary oil potential.
- By the 1930s, oil towns, refineries, pipelines, and export infrastructure were being developed at unprecedented speed.
- During the 1940s and 1950s, Venezuela became the world’s largest oil exporter, earning the nickname “the gasoline station of the world.” Giant fields in Lake Maracaibo and later the Orinoco Belt profoundly shaped the nation’s economy, politics, and global influence.
- Venezuela was also the site of Schlumberger’s first major electric logging project in 1929, a technological breakthrough that transformed reservoir evaluation worldwide.
Today, Venezuela holds the largest proven oil reserves on Earth — more than 300 billion barrels. Yet decades of mismanagement, nationalization, sanctions, and political instability have led to a steep decline in production.
International companies such as Shell (1913), ExxonMobil via Standard Oil (1920s), Chevron as Standard Oil of California (1920s), TotalEnergies (1990s), and Eni (1998) once played central roles in Venezuela’s oil development. Many later exited or saw assets expropriated following the nationalization wave under Hugo Chávez in the 2000s.
Today, PDVSA (Petróleos de Venezuela S.A.), the national oil company, is in control. However, much of the country’s immense oil potential remains untapped due to aging infrastructure, limited investment, and ongoing geopolitical constraints.
Legacy of Oil Development in Venezuela
In its formative years, Venezuela was not only a production leader but also a pioneer in oilfield technology and governance. SLB’s first commercial electric logging run in 1929 at Campo La Rosa marked a global milestone in subsurface evaluation. Many of the oil industry’s early technological and institutional “firsts” were rooted in Venezuelan fields.
Venezuela’s contributions are often underappreciated. The 1943 Hydrocarbons Law fundamentally reshaped upstream economics by introducing the 50/50 profit-sharing model, later adopted by producing nations worldwide. Long before the creation of OPEC or the rise of deepwater exploration, Venezuelan professionals helped establish international standards for petroleum operations.
From early offshore drilling in Lake Maracaibo to training generations of geoscientists and engineers, Venezuela did more than produce oil — it produced knowledge.
As energy historian Gamal Mouallem observed:
“An extraordinary reminder of how Venezuela’s oil story began, and how deeply it shaped global energy history.
Beyond Zumaque I and Barroso II, Venezuela was also a pioneer in oil governance and technical excellence. The 1943 Hydrocarbons Law established the famous 50/50 profit-sharing model, redefining relations between host countries and international operators.
By mid-century, Venezuela was exporting not only massive volumes of oil, but also world-class expertise — geologists, reservoir engineers, drilling practices, and institutional frameworks that influenced operations across the Middle East and beyond. Lake Maracaibo became one of the most advanced producing regions of its time, featuring offshore drilling, early waterflooding, and integrated refining-export systems.
Venezuela’s oil history is therefore not just about reserves or production peaks, but about institutional innovation, technical leadership, and global impact. Zumaque I stands as a symbol of that legacy, and a reminder that the question has never been whether Venezuela has oil, but how vision, stability, and strategy determine what that oil can mean for the nation and the world.”
This article is adapted from a post by Radmir Ganiev, Ph.D., originally published on LinkedIn.
Jamin Djuang
