Donald Trump attempted on Friday, January 9, to convince executives from major oil companies to support an ambitious plan for massive drilling operations in Venezuela, however – at least for now – the industry appears skeptical. According to CNN, Trump and his close associates left the lengthy White House meeting without securing any substantial commitments for billions of dollars in investments, as companies expressed strong skepticism about whether the government’s plan can guarantee the country’s long-term stability.
“Venezuela is uninvestible”
“It’s uninvestible,” said ExxonMobil CEO Darren Woods, in a blunt assessment of the obstacles to conducting business in the country. “Our assets have been seized there twice, so you can imagine that returning for a third time would require very significant changes,” he added. “In its current form, it’s not suitable for investment. There must be lasting and reliable guarantees for investments, as well as changes to the country’s hydrocarbon legislation,” he continued.
Several other executives at the meeting expressed similar reluctance, warning that the industry would first need to secure extensive security and financing guarantees before embarking on a multi-year effort to increase oil production.
Even oil investor Harold Hamm, a major Trump donor, implied he would need much more assurance before supporting the government’s plan. “It has its challenges,” he said about Venezuela. “It requires a massive investment, we all agree on that, and we certainly need time to see it implemented.”
The industry’s lukewarm response threatens to further complicate Trump’s unprecedented intervention in Venezuela, which he envisions as a multi-year engagement aimed at both political change and reshaping the country’s oil-centered economy.
Trump, who ordered Maduro’s arrest but left the rest of Venezuela’s regime intact, insisted on Friday that interim president Delcy Rodriguez would support his efforts to bring American companies back to the country. “They seem to be allies and I believe they will continue to be allies,” Trump said.
He predicted that Venezuela would soon be stable enough for companies to make long-term investments, emphasizing the country’s massive oil reserves and urging companies to seize the opportunity. “If you don’t want to get in, just let me know, because I have 25 people who aren’t here today and are willing to take your place,” he said at one point to the company heads.
Seeking guarantees
However, while energy companies have expressed interest in recent days in participating in U.S. efforts to rebuild Venezuela, they have repeatedly warned that any new investment is likely years away from making economic sense – and depends largely on how the government manages the uncertainty of the coming months.
Many executives at the White House meeting referred to the need for security guarantees, amid concerns about Venezuela’s political trajectory and the safety of future workers and equipment in the country.
This stance also reflects concerns expressed privately throughout the industry about whether Trump can guarantee that any agreements he makes with companies will remain in effect beyond his own presidency, or even after a change of power in Venezuela.
Trump tried to reassure executives by saying they would have “absolute security, absolute protection,” but gave no details and refused to commit federal resources to the issue.
When pressed by reporters after the meeting, Energy Secretary Chris Wright only said that the government’s initial plan was to “change the behavior of Venezuela’s government.”
Trump’s $100 billion target
Wright continued to speak about the industry’s “tremendous interest” in Venezuela, citing Chevron estimates that it could increase its current production by 50% within the next 18 to 24 months. Chevron, which is the only American oil company currently operating in Venezuela, reported that increasing current production would only be possible if it first received certain “permits” from the government.
However, regarding the $100 billion in new investments from the industry that Trump has claimed will soon be directed toward revitalizing Venezuela’s oil production, Wright admitted that no substantial progress has been made toward achieving this goal so far.
“I think it’s an absolutely reasonable number,” he said, but rebuilding the country “really takes time.” “This isn’t next week, it’s not next month, but this is the path we’re aiming to get on,” Wright concluded.
