Top executives from major American oil corporations are set for a crucial meeting at the White House this Friday, where they will deliberate on potential investment plans for Venezuela. This comes just days after US forces ousted President Nicolás Maduro. While President Donald Trump and Energy Secretary Chris Wright have expressed strong enthusiasm, claiming companies are ready to invest billions, a significant wave of skepticism is emerging from investors and the companies themselves.
Investor Skepticism Meets Geological Potential
The core of the dilemma lies in Venezuela's vast but troubled oil reserves. The country holds the world's largest estimated crude reserves, representing a compelling geological prize. However, the memory of asset nationalization and unpaid claims worth billions of dollars, which drove firms like Exxon and ConocoPhillips out nearly two decades ago, remains fresh.
David Byrns, portfolio manager at American Century Investments, a major Chevron and Exxon shareholder, highlighted the prerequisites for any return. "Investors will want to see long-lasting stability and good fiscal terms to protect against the risk of asset nationalization, which we’ve seen from Venezuela in the past," he said.
This caution was echoed in private meetings at the Goldman Sachs energy conference in Miami. Sources told Reuters that executives from Chevron and ConocoPhillips offered few details but were clear about not making rash decisions. Both companies declined to comment.
The Three-Phase Plan and On-Ground Uncertainties
The US administration, led by Secretary of State Marco Rubio, has outlined a three-step process for Venezuela: initial stabilization, a recovery phase ensuring oil company access, and finally a political transition. However, the practical execution of this plan is shrouded in uncertainty.
Ali Moshiri, Chevron's former president for Africa and Latin America, now CEO of Amos Global Energy, stated his firm's interest is contingent on the US clarifying who will manage the transition. "That decision must be made, it is the precondition for investors," Moshiri emphasized. The question of how different power centers in Caracas, now under interim leader Delcy Rodriguez, will cooperate without Maduro adds to the complexity.
Geoffrey Pyatt, former Assistant Secretary of State for Energy Resources, summed up the challenge: "The tension is between the compelling geological resource and the obvious business opportunity, and the considerable above-ground risk, uncertainty and unpaid claims."
Pressure, Infrastructure, and First Movers
There are concerns that companies might feel pressured to invest quickly to avoid future repercussions with the US administration. Samantha Carl-Yoder of lobbying firm Brownstein Hyatt Farber Schreck posed critical questions: "Will the administration hold permits and licensing hostage? Will the administration provide some financial incentives to companies going in?"
Even for service companies, poised to benefit first from rebuilding Venezuela's dilapidated infrastructure, enthusiasm is tempered. Trey Adams, President of Helmerich & Payne, noted his company's readiness with assets in neighbouring Colombia but stressed the need for "the right customer-partner relationship."
Matthew Sallee of Tortoise Capital, a Chevron shareholder, voiced a stark warning that reflects broader investor sentiment. He said he could support investments if returns were clear, but cautioned, "If Chevron says we're going to dedicate multi-billion dollars a year to Venezuela, we would probably sell."
The White House meeting on January 9 will include representatives from 17 major firms, including ConocoPhillips, Exxon, Chevron, Spain's Repsol, and trading giants Vitol and Trafigura. As foreign embassies begin arranging visits for oil company reps next week, the gap between political ambition and investor pragmatism regarding Venezuela's future will be put to the test.
