President Trump says Venezuela will give US millions of barrels of oil
President Donald Trump has said Venezuela will transfer 30 million to 50 million barrels of oil to the United States after the capture of Nicolas Maduro.
WASHINGTON — Some U.S. oil executives told President Donald Trump that their companies are not ready to invest in oil operations in Venezuela unless major changes are made to ensure the business’ survival.
When President Trump met with executives from 17 oil companies on January 9, nearly a week after the U.S. military captured President Nicolas Maduro, the oil industry pointed out challenges to Trump’s Venezuelan oil plan.
“We first entered Venezuela in the 1940s. We had our assets seized twice,” said ExxonMobil CEO Darren Woods. “So you can imagine that a third reentry would require some fairly significant changes from what we’ve seen here historically and from where we are now.”
President Trump said the United States would take control of 30 billion to 50 billion barrels of Venezuelan crude oil and was trying to persuade U.S. oil companies to spend billions of dollars upgrading aging oil infrastructure to boost the country’s energy production. He said it’s not enough for companies to sell oil to both Americans and Venezuelans and get their money back through profits.
But Mr Woods said existing legal and commercial challenges made the country’s oil “uninvestable” unless changes were made to legal, financial and safety guarantees. “Permanent investment protection is needed and domestic hydrocarbon laws need to change.”
If the Trump administration can address those needs, Woods said ExxonMobil could quickly “get back on track.” He said the company plans to assemble a technical team to assess the current state of Venezuela’s oil industry. “We haven’t been to this country in almost 20 years,” he said.
President Trump said he wants to reach agreements with oil companies that include security guarantees to keep them “physically safe in addition to their financial security.”
“We know what we want and what we have to have,” President Trump said of a potential deal. “We have to get them to invest and then get the money back as quickly as possible. And then we can divide everything between Venezuela, the United States and them. I think it’s easy. I think the equation is simple. We start with a brand new plate.”
Vice President J.D. Vance, Secretary of State Marco Rubio, Secretary of Energy Chris Wright, and Secretary of the Interior Doug Burgum joined President Trump and oil executives at the meeting.
Harold Hamm, chairman and CEO of Continental Resources, told President Trump that he was “certainly excited as an explorer” about the possibility of investing in Venezuelan oil. “We all have that in our blood. It’s a very exciting country and we have a lot of reserves. There are challenges, but the industry knows how to deal with them.”
“Like Darren said, go in with your eyes open and do the best you can with the team you’ve got,” Hamm added, referring to ExxonMobil’s CEO.
The oil company most bullish about opportunities in Venezuela is Chevron, the only U.S. company currently operating there, with 3,000 employees in the country.
Chevron Vice Chairman Mark Nelson said the company’s oil production in Venezuela has increased by 40,000 barrels per day to 240,000 barrels per day over the past five to seven years.
“I think we will soon have a path forward to be able to scale up the increases from these joint ventures by 100%, essentially immediately,” Nelson said.
He said having Chevron employees already on site is a “clear advantage.”
ConocoPhillips Chairman and CEO Ryan Lance said the company needs to talk with banks to restructure the oil company’s debt, which invests billions of dollars in energy infrastructure. He singled out the Export-Import Bank, the federal government’s official export creditor.
“If we can do that and think boldly, we have the opportunity to quickly and quickly restore the quality of what has been lost in Venezuela over the last 25 years.”
At least one alternative energy expert also said Venezuela would be a tough sell for oil company executives.
Jesse Lee, a senior adviser at Climate Power and former senior adviser at the National Economic Council during the Biden administration, said oil companies “are going to need all kinds of guarantees to make a successful mathematical investment.” Climate Power is an American clean energy and climate change advocacy organization.
“I can’t imagine any industry putting $100 billion into a country that knows it’s going to go to war someday,” Lee said. Contributor: Dinah Boyles Pulver
X Contact Joey Garrison at @joeygarrison.
