Trump Meets Oil Leaders to Revive Venezuela’s Output
President Donald Trump is scheduled to convene with energy executives at the White House in the coming week as he aims to engage Western companies in the effort to restore Venezuela’s oil industry. According to sources, the parties have engaged in discussions regarding a potential meeting on Thursday or Friday, which would involve Trump, Energy Secretary Chris Wright, and Interior Secretary Doug Burgum. A White House official stated, “The timing remains fluid.” Secretary of State Marco Rubio is also expected to attend the planned sit-down, according to sources. The discussions illustrate Trump’s enthusiasm for tapping into Venezuela’s vast oil reserves, viewing them as a potential revenue stream and a chance to enhance US energy supremacy. They arrive merely days following the US military operation that resulted in the capture of leader Nicolás Maduro.
However, certain oil companies express caution about investing tens of billions of dollars in the country over the next decade. Executives seek assurances of both physical and financial security as worries about the stability of a post-Maduro government continue to grow. Exxon Mobil Corp. and ConocoPhillips once operated in Venezuela but exited following the nationalization of their assets by Hugo Chávez, Maduro’s predecessor, in the mid-2000s. Chevron Corp. currently operates in Venezuela with a special license granted by the US government. Venezuela currently produces approximately 1 million barrels of oil per day — a stark contrast to its peak in the 1970s. “Just sustaining current production would require $53 billion of investment over the next 15 years,” analysts said in a report. Companies that participate in Trump’s rebuild initiative would be required to assist in revitalizing the pipelines, pump stations, and processing facilities that constitute Venezuela’s aging and deteriorating oil infrastructure.
Wright is anticipated to engage with executives from leading oil companies at the Goldman Sachs Energy, Clean Tech & Utilities Conference on Wednesday in Miami, according to a White House official. Representatives from Chevron, ConocoPhillips, and other companies are confirmed to attend the summit. Additionally, representatives from Spain’s Repsol SA, which operates in Venezuela but lost its US license to export oil from the country last year, are scheduled to meet with Trump administration officials this week, according to a White House official. Representatives from some oil companies have voiced apprehension regarding industry-wide meetings, which they believe may restrict their capacity to communicate openly without violating US antitrust regulations. In the present context, a gathering might also be interpreted as a support for Trump’s intentions to engage Western oil companies in the reconstruction of the Venezuelan oil industry. Industry representatives have already expressed the need for further assurances regarding political stability in Venezuela, as well as the safety of their personnel and assets, according to the sources. Potential incentives are currently being deliberated.
“Although we do not yet know how the White House plans to de-risk new investment in the Venezuelan oil patch, both the President and Secretary of State Marco Rubio have hinted at backstops,” it is stated in a note for clients Tuesday. “Generally, to make the numbers work amid greater political uncertainty, we would expect operators to seek more significant incentives and/or protections. Political risk weighs heavily on any investment,” said John Bolton. “Anybody who thinks the Venezuelan oil industry is going to emerge from the ashes in a matter of weeks or months, or even a couple of years, doesn’t know how bad the situation is,” Bolton told Bloomberg Television on Tuesday. “I’d like to know what CEO of what major American oil company is just getting all of his top advisers together to get on a plane to go to Caracas, and put billions and billions of capital expenditures into Venezuela,” he said. “The political situation is unstable.”
