US Investment Groups Eye Venezuela's Reopening Oil Sector

US investment groups are racing to capitalise on the reopening of Venezuela's oil sector, targeting underinvested oilfields and launching new investment vehicles after US President Donald Trump's January call for companies to invest $100 billion to help rebuild the country's energy industry, the Financial Times reported.

Among the early movers is Miami-based Lionheart Capital, which has signed a letter of intent aimed at merging its publicly listed affiliate, Lionheart Holdings, with Keo Energy, a group with oil assets in Venezuela's Maracaibo Basin, according to London-based business daily the FT.

A source familiar with the proposed transaction told the Financial Times that the merger would create the first Nasdaq-listed company providing US and institutional investors direct access to Venezuelan oil assets.

Lionheart plans to list the oil company at a valuation of about $1 billion through a merger with its Lionheart Holdings blank-cheque vehicle, which raised $230 million in a 2024 public offering.

The source added that while preliminary talks have begun, no final deal has been reached and discussions could still collapse.

Lionheart Holdings is also seeking shareholder approval next week to extend the time available to complete an acquisition.

Keo Energy, a subsidiary of Sweden's Maha Capital, owns a 40% stake in PetroUrdaneta, a Venezuelan oil company that controls onshore oilfields in the Maracaibo Basin.

The assets, which produced hundreds of thousands of barrels a day in the 1950s, now produce fewer than 2,000 barrels daily after decades of underinvestment.

Venezuela's state-owned PDVSA owns the remaining 60%.

According to an investor presentation seen by the Financial Times, PetroUrdaneta's production could rise to 54,000 barrels of oil equivalent per day by 2029 with fresh investment.

The Financial Times reported that Washington lifted sanctions allowing US firms to invest in Venezuela's oil sector following the military operation in January that resulted in the removal of communist leader Nicolás Maduro.

Venezuelan authorities subsequently approved a new hydrocarbons law that weakens PDVSA's role and allows private companies to operate wells directly.

Since then, major energy groups including Repsol, Eni and Shell have signed agreements as the sector reopens.

Local executives have been travelling across the country seeking new deals, according to the report.

Bryan Sheffield, co-founder of Austin-based private equity group Formentera Partners and one of the executives who attended a White House summit in January focused on Venezuela, told the Financial Times that he visited the country in April and met interim president Delcy Rodríguez.

"We talked about the oil and gas business and what it could mean for Venezuela, and it could be a game-changer," Sheffield said.

He added that Formentera has not yet made a final investment decision but has dispatched a team to assess opportunities.

Ali Moshiri, Chevron's former head of Latin American operations, told the Financial Times that his Amos Global Energy Management fund is seeking to raise $2 billion and has already identified multiple Venezuelan oil assets for potential investment.

The renewed interest has energised Venezuela's oil industry.

"My phone hasn't stopped ringing . . . Banks want to lend and people want to make deals," an oil executive in Maracaibo told the Financial Times.

A Caracas-based fund manager told the newspaper that geopolitical tensions in the Middle East had further increased investor interest.

"It's unbelievable: the Middle East is on fire and Venezuela is stable," he said.

Investment interest is also spreading beyond oil.

The Financial Times reported that Yorkville Advisors, a financial group with ties to Trump's family, launched a SPAC last month that plans to raise $200 million to acquire a Venezuelan business.

Meanwhile, Miami-based conglomerate Grupo Cisneros said in April that it had secured two-thirds of a planned $1 billion investment fund, known as Intrépida, targeting sectors including agribusiness, communications and real estate.

"I've been surprised by how easy it has been to raise the capital," Grupo Cisneros chief executive Adriana Cisneros said during an April press conference at the Caracas Stock Exchange.

"It's a very interesting mix, with many American and Latin American family offices, some institutional investors and sovereign wealth funds."