After the dramatic ouster of strongman Nicolás Maduro, President Trump and his new counterpart in Venezuela urged major energy companies like ExxonMobil and ConocoPhillips to usher in a golden age of oil prosperity in the Latin American country.

But Exxon and Conoco, still leery two decades after Venezuela nationalized their assets there, are taking their time. Instead, a much smaller California oil producer backed by European investors, Pacific Coast Energy, is among several private firms suddenly positioned to grab some of the first assets made available by Venezuela in a new era for its oil industry.

?A ?c?omplication: Venezuela's prominent ?C?isneros family ?asserts rightful ownership of some of the same oil fields that Pacific Coast is negotiating to operate. The family alleges that Venezuela's interim government ?shopped the assets to the new entrant after secretly and illegally ?nullifying rights the Cisneros have had for a decade in a joint venture called PetroDelta. They claim $2 billion in losses.

Pacific Coast is little known outside the oil industry and is attempting its first entrance into Venezuela. It has pumped heavy oil in California for 30 years, supplying the likes of Chevron in the state, and has developed fields in West Africa and Europe.

The company referred questions about the Cisneros assertions to Petróleos de Venezuela, the country's state-run oil giant, which didn't respond to requests for comment.

"Establishing a presence in Venezuela aligns with [Pacific Coast's] core capabilities and strategic focus on heavy oil extraction and the rejuvenation of mature, low-decline oil fields," its chief executive, Klaus Hasbo, said in a July 30 statement announcing talks with Venezuelan officials to operate in the country.

Pacific Coast is registered in the Santa Barbara County, Calif., town of Orcutt through a corporate structure that includes a parent entity in Delaware by the same name. It discloses limited information about its ownership, but says it has been controlled since 2019 by Europe-based investors.

One of the Pacific Coast owners, Belgian-Pakistani investor Alshair Fiyaz, visited Venezuela earlier this year, as did Santa Barbara-based Hasbo. Fiyaz, who couldn't be reached, has been associated with a number of oil and financial investments and is also known for his ownership of a luxury yacht and polo grounds in St. Tropez, in southern France.

Business challenge

The disputed claims highlight the challenges of doing business in Venezuela eight months after the U.S. asserted de facto control of the energy industry and encouraged American investors to take a new look. Venezuela, which nationalized foreign companies' oil assets in the 1970s and again in the 2000s, is trying to lure back U.S. producers to its oil industry-dilapidated after years of mismanagement-with promises that new legal and regulatory reforms implemented under acting President Delcy Rodríguez will smooth out difficulties of the past.

Venezuela's Information Ministry didn't respond to calls and emails seeking comment about Pacific Coast and the Cisneros allegations.

The Trump administration supports U.S. companies leading the recovery of Venezuela's oil production, but it wasn't involved in any advocacy for the transaction involving Pacific Coast, according to a White House official. Nor, however, have the Cisneros allegations raised objections from the Trump administration.

Some in Washington see smaller U.S. oil companies as more nimble and better suited to reviving Venezuela's crude production than the established players, even under the new, more motivated regime.

On Tuesday, Hunt Oil, another U.S. wildcatter with a long history of working in far-off jurisdictions, signed a production-sharing agreement with Venezuela to help pump oil from two fields on the country's eastern flank.

Unusual procedure

Pacific Coast began talking with authorities in Venezuela about opportunities in February, while also making its case in Washington, according to people familiar with the matter.

In its statement about its Venezuela plans, Pacific Coast said it has now made deals with 30 companies in the Latin American nation for supplies, equipment and services, plus held talks with oil traders Trafigura and Vitol about marketing the crude it would produce. It also said it is completing the purchase of drilling rigs for the new project, which would initially involve two blocks.

Ahead of Pacific Coast's move into Venezuela, Fiyaz and a group of company executives in April made visits to PetroDelta offices in the eastern oil hub of Maturin, according to people familiar with the situation.

The Cisneros family says it had no knowledge that PetroDelta stakes were on the block.

"This has been an abrupt, arbitrary and unusual procedure," said Juan Domingo Alonso, a lawyer for the Cisneros family entity, DP Delta Finance, that formed the venture.

Alonso said Delta Finance was notified by Venezuela's government last week that an administrative process had been opened into the venture in May and that, based on a finding that they had failed to fulfill their financial commitments, their interests were revoked in June. Alonso said Delta Finance was pushed out without any opportunity to address the allegations, which they deny, or to appeal the decision, despite having a contract good through 2042.

The loss of the assets is a remarkable twist for the heirs of Oswaldo Cisneros, who died in 2020 and whose businesses are now overseen by his widow and children. With extended family who dominate Venezuelan industries from beer to television broadcasting, the Cisneros have long been the country's most prominent business dynasty. They are part of a regime-friendly elite that successfully navigated years of authoritarian rule as well as a socialist system that drove private capital from the country.

As Venezuela was falling into political and economic upheaval under Maduro, Oswaldo Cisneros, who had amassed his fortune through mobile-services providers and sugar, expanded into oil. In 2016, he spent more than $1 billion acquiring and investing in a 40% stake in PetroDelta for six oil fields, with the Venezuelan government holding the remainder. Oswaldo Cisneros had bet on rebounding crude prices and the plan was to triple output to 115,000 barrels a day.

Instead, industry mismanagement and a punishing economic depression left PdVSA and its partner squabbling over payments, according to people familiar with the business. U.S. sanctions on Venezuela's financial system severely crimped the investment into the venture. Over the past year, output was around 10,000 barrels a day.

Alonso said Delta Finance is owed hundreds of millions in unpaid services fees and dividends that were never disbursed by the government. In addition, Venezuelan authorities never liquidated the joint venture, and therefore can't transfer its oil fields to a new partner, he said.

"This just wasn't what was expected for the sector...confiscating assets and with everything done in the dark, behind Delta Finance's back," Alonso said.

Pacific Coast said it is hopeful about the prospects of reaching a long-term production deal with Venezuela. It claims to have raised $800 million in debt, equity and trade finance to fund initial operations of the Venezuela venture.

Venezuela's oil minister, Paula Henao, told a Houston investment conference on Wednesday that the country's new legal and regulatory reforms offer "a much clearer regulatory framework, with legal certainty for the investor, with dispute resolution."

It "truly fills us with pride and happiness to know there is so much interest in investing in Venezuela," she said. "Venezuela is willing to negotiate, to commercialize, to agree on those new deals."