At the helm of Government Curated, political savant Donald Gainsborough has a unique vantage point on the high-stakes world where policy and energy collide. Following a pivotal meeting where the possibility of reinvesting in Venezuela’s oil sector was floated, the industry is buzzing with a mix of bold ambition and deep-seated caution. We sat down with him to unravel the complex dynamics at play. Our conversation explored the immense financial scale of rebuilding a nation’s energy infrastructure, the starkly different risk appetites among corporate giants, the unconventional security models being proposed to protect these ventures, and the intense competitive pressures shaping these monumental decisions.
An estimated $100 billion is needed to rebuild Venezuela’s oil sector over a decade. How do companies reconcile this massive figure with more cautious steps, like Chevron’s plan to boost existing production by 50%? Could you walk me through the typical phasing of such an investment?
That $100 billion figure is a North Star, not a starting point. It represents the ultimate prize, the full-scale reconstruction of a dilapidated sector, but no sane executive is writing that check upfront. What we’re seeing with Chevron is the classic, prudent first phase. You don’t begin by building brand new, multibillion-dollar facilities in a fragile environment. Instead, you focus on existing assets—the low-hanging fruit. Their plan to increase production by 50 percent over the next 18 to 24 months is about testing the waters, proving the operational thesis, and generating early cash flow with minimal new capital. It’s a way to build confidence, both internally for their board and externally for the wider market, before even considering the massive, decade-long commitment that $100 billion implies.
We’ve seen some executives express they are “fully committed” to rebuilding Venezuelan infrastructure, while many others remain hesitant. What specific operational and political risks are creating this divide? Please describe the key milestones a country must meet to turn that widespread caution into firm commitments.
The divide you’re seeing is a direct reflection of different corporate cultures and risk tolerances. On one side, you have an independent producer like Hilcorp, whose CEO is a major donor and sounds “fully committed and ready to go.” They may be more agile and willing to take a gamble. On the other, you have the supermajors who have been burned before, like Shell, which was forced out during the nationalizations of the 1970s. The core risks are immense: political instability, the sanctity of contracts, and the sheer physical challenge of rebuilding what’s been described as a “dilapidated” infrastructure. To turn caution into capital, Venezuela must hit critical milestones. This includes establishing a stable, predictable government, enacting clear laws that protect foreign investment from seizure, and demonstrating on-the-ground security. Early successes from first-movers will be the most crucial milestone of all; the rest of the industry will be watching them like a hawk.
A proposal was made for investing companies to be protected by a combination of Venezuelan forces and their own private security, without U.S. military involvement. From an operational standpoint, how viable is this model? Share some details about the primary challenges and necessary preparations.
This hybrid security model is operationally complex and fraught with peril, but it’s not without precedent in high-risk regions. The viability hinges entirely on trust, alignment, and crystal-clear rules of engagement. The primary challenge is the chain of command and coordination. Who is in charge during a crisis? How do you ensure local forces and a company’s private security don’t end up in conflict with each other? You’re dealing with, as was said in the meeting, “tough people” who operate in areas “you wouldn’t want to go.” The necessary preparations are enormous. It requires intensive diplomatic groundwork, vetting local partners exhaustively, and running countless drills to prepare for worst-case scenarios. It’s a delicate dance where one misstep could have catastrophic consequences for both personnel and the investment itself.
It was suggested that for every company hesitant to invest, many others are waiting for the opportunity. How does this kind of competitive pressure influence a company’s decision-making on high-stakes projects? Does it accelerate timelines, or does it increase the perception of risk?
It does both, and that’s the paradox. The declaration that for every hesitant firm, “there are 25 people not here today willing to take your place,” is a classic maneuver to create a fear of missing out. For some companies, particularly those with a higher risk appetite or a strategic need to replenish reserves, this pressure absolutely accelerates their evaluation process and pushes them toward a “yes.” They don’t want to be locked out of a generational opportunity. However, for more conservative, process-driven companies, that same pressure can be a red flag. A frantic rush can look like a speculative bubble, increasing the perception of herd mentality over sound due diligence. It forces a very real, very tense conversation inside the boardroom: are we moving fast because the opportunity is sound, or because we’re afraid of being left behind?
What is your forecast for foreign investment in Venezuela’s oil sector over the next five years?
My forecast for the next five years is one of cautious, tiered entry, not a capital flood. We will see two distinct groups emerge. First, the pioneers—companies with a high tolerance for risk or a legacy position, like Shell, that feel they have a right to be there. They will make initial, targeted investments, similar to Chevron’s plan, focusing on restarting and optimizing existing fields rather than massive greenfield projects. The second, much larger group, representing the bulk of that potential $100 billion, will remain on the sidelines. They will watch, wait for political and legal frameworks to solidify, and analyze the operational results of the first movers. So, the next five years will be defined by small-scale, strategic bets, not the full-scale reconstruction the country ultimately needs. The big money will only flow after the pioneers have proven it can be done safely and profitably.
