ExxonMobil recently voiced strong concerns about investing in Venezuela, calling it “uninvestable” without major changes. CEO Darren Woods shared these thoughts during a meeting with Donald Trump, where leaders in the energy sector gathered to discuss boosting the country’s struggling oil industry.
Woods emphasized the challenges due to Venezuela’s current legal and commercial frameworks. He pointed out that investment protections need to be durable, and hydrocarbon laws must be revised for companies to feel secure. Historically, Venezuela has taken assets from Exxon, underscoring the risk for investors.
While Trump urged energy giants to commit billions—suggesting they could help increase production to ease oil prices in the U.S.—many executives remained cautious. For instance, although other companies showed some optimism, Woods’s comments reflect a deeper hesitation. The oil industry faces high legal, financial, and security risks in Venezuela. Meghan O’Sullivan, a geopolitics expert at Harvard, highlighted the significant risks involved.
Some companies like Chevron and Repsol expressed potential for production increases, should they receive appropriate support from the U.S. government. Chevron, for example, could boost production by 50% in the next few years. Shell also revealed opportunities worth billions, contingent on the lifting of U.S. sanctions.
Despite Trump’s push for a quick decision on investments, he did not offer the financial guarantees that many companies seek. He stated that previous losses wouldn’t be compensated, telling ConocoPhillips that they should focus on future profits rather than past expropriations.
While there’s interest in Venezuela’s vast resources, experts note that the path to investment is fraught with uncertainties. Legal advice is crucial, as companies need permissions for any dealings. Carlos Solé, from Baker Botts, mentioned that the political landscape remains unstable, complicating potential investments.
Overall, while the prospect of tapping into Venezuela’s oil reserves is appealing, the realities of its legal and political climate make it a daunting endeavor for many companies. The industry’s hesitance highlights the complexity of investment in a country with a troubled history and uncertain future.
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