Introduction
Venezuela is difficult to explain over a pleasant dinner.
Venezuela’s complex history and hardships in recent decades are difficult to explain over dinner conversation — if you are looking to have a pleasant meal — or during a short elevator ride. This series is the longer answer.
The best hardware, the worst possible software
Growing up in Venezuela, I saw firsthand the country’s immense natural resources, unparalleled natural beauty, and the ingenuity and kindness of its people. However, as a law school student in Caracas in the 1990s and later as a Law Clerk at the Venezuelan Supreme Court, I also had a front-row seat to the powerful, nefarious and corrupt political and ideological forces that would undermine forty years of institutional democracy. A cultural, economic and political debacle ensued.
So when someone asks what is happening in Venezuela, the sardonic, tweet-like reply usually comes to mind as a pithy response.
Imagine a product with the best-of-its-kind hardware and the worst possible software.The short answer, offered at dinner
Should my interlocutor remain interested after this lamentation, deciding the narrative avenues to follow will depend on the context of the conversation and the level of knowledge of Venezuela of those present. What follows is one of the longer avenues.
Writing after the earthquakes
Right now, writing about Venezuela without addressing the pain and suffering that the country and its citizens are experiencing in the wake of two catastrophic earthquakes in late June 2026 seems superfluous. Family and friends are rebuilding homes and businesses whenever they are not helping those who lost their entire livelihoods, or worse.
But geopolitics do not respect or acknowledge natural disasters. And friends, clients and other stakeholders and interested parties remain in need of reliable information and intelligence to make informed investment and other decisions — decisions that may support the country’s potential recovery from decades of ruinous governance.
The US government has vowed to modernize and energize the Venezuelan oil industry, albeit while backing the same regime that drove that industry into the ground. Those even mildly knowledgeable about Venezuela’s recent history are skeptical about any modernization, even where it has been touted as an unmissable investment opportunity.
To that end, 221B Partners will be publishing a series we have dubbed the Caracas Dossier, which seeks to address many of these questions. Let us start at the beginning: the landscape in Venezuela is, and remains, incredibly fluid.
A fluid landscape
The removal and transfer of Nicolás Maduro to the US to face drug trafficking charges in January 2026, and the subsequent takeover and tutelage by the Trump administration over the regime of acting socialist president Delcy Rodríguez, has produced increased interest from investors all over the world across a myriad of sectors of the Venezuelan economy. Interestingly, it appears that at least in the first two quarters of 2026, most of that interest has come from smaller, high-risk-seeking firms rather than larger, more institutional investors.
Legislative changes in Venezuela have attracted renewed attention from old and new actors in the oil and gas and mining sectors. Yet before the June earthquakes, the risks that preceded the US takeover — for any investor inside Venezuela or looking to invest in it — remained the same as they were just before Maduro’s January ouster.
Although acting president Delcy Rodríguez is running the Venezuelan government on an interim basis, she is walking a careful line between her radical Chavista base and her Washington overlords. Analysts note that she is moving as slowly as possible on the political reforms demanded by the United States, hoping Washington’s focus will wane and that the results of the US midterm elections will diminish President Trump’s leverage.
Evidence of that ongoing tension was on display on August 14 — what would have been Fidel Castro’s 100th birthday — when Rodríguez posted on X that Castro had been a guiding figure for the world’s free nations. Shortly thereafter, Secretary of State Marco Rubio posted that Castro had been a complete failure at everything except destroying Cuba and impoverishing, jailing and murdering his own people.
Reader’s map
From a compliance and due diligence perspective, investing in Venezuela means five critical areas.
The US takeover and the subsequent earthquakes elevate the complexity of managing risk in each of these areas by an order of magnitude. Each becomes an installment of this dossier. Select one.
The most complex element to analyze in the current environment. OFAC has issued general and sector-specific licenses carving out exceptions — but exposure still arrives through dollar transactions, U.S. banks, U.S. persons, regime-affiliated entities, SDNs, the 50 percent rule, sector restrictions, and secondary sanctions.
“Uninvestable”
In the past seven months, experts have warned that even though Venezuela represents a tremendous opportunity given its abundant resources and strategic geographical location, that opportunity must be accompanied by a legal framework that protects badly needed investment. Some have speculated that reconstruction and development expenditures may exceed acquisition values, and that payback periods could stretch for years.
The clearest illustration of the resulting ambivalence is the sequence of statements from a single company over three months.
ExxonMobil CEO Darren Woods, who knows the country well, said in a White House meeting that Venezuela was “uninvestable” under existing legal and commercial frameworks. The statement generated a strong rebuke from the Trump administration.
Two rigs
The Wall Street Journal reported that although President Trump summoned Big Oil executives to the White House in January of this year and asked for $100 billion in new investments in Venezuela, the country has since reported the same number of active drilling rigs it had last August: two.
$100bn
New investment requested from Big Oil executives summoned to the White House.
Two
Unchanged from August 2025. In Venezuela, rig count is a measure of investor confidence.
40 yrs
Of institutional democracy dismantled by the forces that took hold from 1998 onward.
In a country where such rigs are a measure of investor confidence, Venezuela is still a long way from the oil boom the Trump administration forecast.
The thesis
A modern investment thesis in Venezuela that has legal guarantees — enforceable contracts, stable fiscal terms, and independent dispute resolution — can then focus on rebuilding infrastructure, logistics viability, and export pathways, not just oil reserves.
However, if the Trump administration is occupied elsewhere in the world, the regime in Venezuela will have little incentive to undertake the substantive changes that would make those guarantees real.
Risk sherpas
Thus, any potential investor in Venezuela should seek — and needs — guidance that goes beyond mere check-the-box platforms, or even the most advanced AI-powered model with up-to-date data regarding the latest legal, political, social and economic changes and shifts in country.
The ideal risk sherpas are subject-matter experts who are intimately involved and can discern the on-the-ground idiosyncrasies in Venezuela that affect and inform corporate structures, reputational risk and changes in the rule of law, while also having compliance and anticorruption expertise under US and international frameworks.
What is coming
221B will be sharing its insights in five installments.
We hope to provide interesting data and analysis to help understand the forces impacting Venezuela, and those interested in the country.
International sanctions compliance
Probably the single most complex element to analyze in the current environment, and a genuine moving target: where exposure actually comes from, the unreliable public record, the enabler ecosystem, and the OFAC general license map as it stands.
- Eight exposure triggers
- 50 percent rule
- General licenses
- Eleven live concerns
Anticorruption
The Foreign Corrupt Practices Act and other applicable anticorruption legislation. Even though the FCPA has taken a secondary role under the current US administration, it is still a law — and compliance with its mandate remains a guiding principle.
- FCPA
- Enforcement posture
- Third-party risk
- Books and records
Real corporate structure
What a Venezuelan entity actually is, underneath what the registry says it is: beneficial ownership chains, nominee arrangements, and the offshore layering built by two decades of laundering — read against a public record that has been incomplete and unreliable for years.
- Beneficial ownership
- Nominees
- Offshore layering
- Registry gaps
Reputational risk
How a counterparty looks versus what a counterparty is. The sums looted purchased access to sophisticated enablers — law firms, wealth advisors, tax planners, financial engineers — and to a reputation-defense industry that has spent years removing adverse information from the searchable record.
- Enabler ecosystem
- Adverse media decay
- Search suppression
- Counterparty screening
Rule of law & arbitral protection
Whether the paper holds. Enforceable contracts, stable fiscal terms and independent dispute resolution — the absence of which is why Venezuela was called “uninvestable” under the then-existing legal and commercial framework in February 2026.
- Contractual protection
- Arbitration
- Fiscal stability
- Judicial independence