Less than a week after the United States ousted President Nicolas Maduro, President Donald Trump met with more than a dozen oil companies at the White House on Friday afternoon to discuss plans to invest in Venezuela.
exxon CEO Darren Woods; conocophilips CEO Ryan Lance chevron Vice President Mark Nelson also attended. executives from halliburton, Valero and marathon was also in attendance.
President Trump said oil companies would spend at least $100 billion to rebuild Venezuela’s energy sector. Because the U.S. provides security and protection, “they can get their money back and get very good returns,” he said.
The president said the United States would decide which oil companies enter Venezuela. He said the White House would “work out an agreement with both companies” on Friday or shortly thereafter.
“One of the things the United States will get out of this is further reductions in energy prices,” President Trump said.
Industry sources told CNBC that the White House called the meeting. Sources said it had not been scheduled at the request of the oil company.
According to the U.S. Energy Information Administration, Venezuela has the world’s largest proven oil reserves at 303 billion barrels, or about 17% of the world’s total.
However, the country’s oil sector is in dire straits. Production has fallen from a peak of about 3.5 million barrels per day in the 1990s to about 800,000 barrels per day today, according to data from energy consulting firm Kpler.
Rystad Energy estimates that it will cost more than $180 billion by 2040 for Venezuela to reach 3 million barrels per day of production.
Collaboration with Chevron
The Trump administration has provided few details about how it will encourage large oil companies to invest in countries with a history of nationalizing industrial assets.
Chevron is the only U.S. oil company currently operating in Venezuela through a joint venture with state oil company Petroleos de Venezuela (PDVSA). Energy Secretary Chris Wright told CNBC on Wednesday that the U.S. is working closely with Chevron.
“Chevron is on the ground, so we’re getting daily updates,” Wright told CNBC. “They are actually working (under) this system, so how can we work with them to provide incremental adjustments and changes to further grow their model,” the Energy Secretary said.
Wright said Venezuela’s production could increase by hundreds of thousands of barrels per day in the short to medium term with the introduction of small capital.
Exxon and Conoco are questionable
But Exxon and Conoco will need reassurance to return to Venezuela, Wright said. These companies left the country after former President Hugo Chávez seized their assets in 2007. It has billions of dollars in unpaid claims against the government that it won in arbitration.
“We’ve had assets seized there twice, so you can imagine that a third re-entry would require some fairly significant changes from what we’ve seen before,” said Exxon’s Woods.
Wright said Venezuela’s debts to Exxon and Conoco will need to be repaid at some point, but they are not an immediate priority for the Trump administration. The Energy Secretary said the White House is focused on stabilizing Venezuela’s economy through oil sales.
“We are moving Venezuela to a place where Americans want to do business, where they want to invest new capital and where they want to foster new partnerships,” Wright said.
But absent a dramatic change in the Caracas government, it is unclear whether the White House will be able to persuade companies like Exxon and Conoco to return to Venezuela.
“The slow-moving big oil companies and their boards are not interested,” Treasury Secretary Scott Bessent said Thursday at the Economic Club of Minnesota.
“What I can tell you is that independent oil companies, individuals, bandits – our phones are ringing off the hook,” Bessent said. “They want to go to Venezuela yesterday.”
Utilization of oil sales
Wright said the United States is controlling Venezuela’s oil exports to put pressure on the Caracas government. Venezuela will ship tens of millions of barrels to the United States, which will then be sold by the Trump administration, with the proceeds held in U.S.-controlled accounts, the energy secretary said.
“We need that influence and control of oil sales to drive the change that absolutely has to happen in Venezuela,” Wright said.
Energy Secretary says the US is not stealing Venezuela’s oil. He said the proceeds will be used for the benefit of 30 million people. President Trump said Wednesday that oil revenue would be used to buy American products.
“I have been informed that Venezuela will only purchase US-made products with the funds received from the new oil deal,” the president wrote on social media on Wednesday.
Purchases include agricultural products, medicines, medical equipment and equipment to modernize Venezuela’s energy sector.
“In other words, Venezuela is committed to doing business with the United States as its primary partner,” President Trump said.
