who controls his energy and what Maduro’s arrest means

The arrest of Nicolas Maduro has brought one of the world’s most politically charged oil industries back into the spotlight, forcing investors to reassess who controls Venezuela’s raw resources and whether they can be significantly revived after decades of decline.

For now, the answer may seem simple. “Petróleos de Venezuela (PDVSA), the state-owned oil company, controls the majority of oil production and reserves,” said Andy Lipow, president of Lipow Oil Associates.

American energy company Chevron operates in the country through its own production and a joint venture with PDVSA, while Russian and Chinese companies also participate through partnerships, although “majority control still remains with PDVSA,” Lipow said.

Venezuela nationalized its oil industry in the 1970swhich led to the creation of PDVSA. Oil production peaked at about 3.5 million barrels per day in 1997, but has since plunged to about 950,000 barrels per day, with about 550,000 barrels per day exported, according to data provided by Lipow Oil Associates.

If a more pro-US, investment-friendly government takes shape in Venezuela, Chevron would be “best positioned” to expand its role, said Saul Kavonic, head of energy research at MST Financial. European companies like Repsol And Eni could also benefit, given their existing positions in Venezuela, he said.

“As it is not yet clear who is in charge in Venezuela, we could see exports stop completely as buyers do not know who to send the money to,” Lipow said. He added that the latest round of US sanctions against a ghost fleet of tankers seriously affected exports, forcing Venezuela to reduce production.

The ghost fleet refers to oil tankers that operate outside traditional shipping, insurance and regulatory systems to transport crude from sanctioned countries. These ships are commonly used to transport oil from countries like Venezuela, Russia and Iran, which face U.S. restrictions on energy exports.

Lipow expects Chevron to continue exporting 150,000 barrels per day, limiting any immediate impact on supply. Still, he said the broader uncertainty could add a near-term risk premium of around $3 a barrel.

This increase would come against a market that many analysts consider sufficiently supplied, at least for the moment. “The oil market is trending toward oversupply right now,” said Bob McNally of Rapidan Energy Group, calling the immediate impact “almost nothing good.”

Venezuela’s long-term importance lies in the type of oil it produces. The country’s heavy, sour crude can be technically difficult to extract, but it is prized by complex refineries, particularly in the United States. “American refineries…love to sip this filthy oil from Venezuela and Canada,” McNally said.

“The real issues are: Will the oil industry be able to come back to Venezuela, end two decades of disrepair and neglect, and get back on its feet?”

If a new government led by opposition leader Maria Corina Machado is established very quickly, sanctions could ease and oil exports could initially increase, with stored oil used to generate revenue, Lipow said. However, a short-term rise could put pressure on prices, he added.

However, any notion of sustainable recovery faces harsh physical limits. “Venezuela’s oil industry is in such a state of disrepair that even with a change in government, it is unlikely to see a significant increase in oil production for years, as substantial investments are needed to rehabilitate existing infrastructure,” he noted.

Similarly, RBC’s Helima Croft warned that the road to recovery is long, citing Venezuela’s “decades-long decline under the Chavez and Maduro regimes.” She said oil executives estimate it will cost at least $10 billion a year to turn around the sector, with “a stable security environment” as an absolute prerequisite.

“All bets are off in a chaotic power change scenario like what happened in Libya or Iraq,” she said.

— CNBC’s Chery Kang and Martin Soong contributed to this report.