Seven months after Nicolás Maduro's removal, ExxonMobil and Chevron still haven't signed a major new investment deal in Venezuela, wary of the country's history of nationalizing foreign assets. Venezuela's oil output has climbed to roughly 1.07 million barrels per day, but the Trump administration is now leaning on smaller independent producers to move faster.
ExxonMobil and Chevron have yet to sign a landmark investment deal in Venezuela seven months after Nicolás Maduro's removal. Negotiations between the interim government and major U.S. energy companies remain bogged down despite the country's vast crude oil reserves.
Majors stay wary of Venezuela's history
Rather than rushing back in, Exxon and Chevron are taking a cautious approach. Executives remain wary of Venezuela's history of nationalizing foreign assets, unresolved compensation disputes dating to the Chávez era, and lingering political uncertainty. According to Francisco Monaldi of Rice University's Baker Institute: "They have been burned twice." That history leaves boards reluctant to approve multibillion-dollar projects unless the opportunity is exceptionally attractive.
Competing for assets, but few deals follow
Several companies are pursuing the same high-quality assets in the Orinoco Belt and Monagas state, pressing for more favorable tax, regulatory, and ownership terms. Yet according to José Ignacio Hernández of Aurora Macro Strategies, that interest has yet to turn into signed commitments from the majors involved.
Chevron has continued expanding production through operational improvements, lifting output to nearly 300,000 barrels per day, but it has stopped short of committing fresh billions to new developments. Exxon, meanwhile, has reportedly scaled back some of its interest after failing to secure enough of the assets it wanted and facing steep costs to rehabilitate previously nationalized infrastructure.
Washington turns to smaller producers
Venezuela's oil production has climbed to roughly 1.07 million barrels per day, up from about 937,000 last year, though it remains far below the country's late-1990s peak. With the majors moving cautiously, the Trump administration has increasingly turned to smaller independent producers that can move faster and supply capital immediately.
Several privately held firms have already signed preliminary agreements. Still, analysts caution that fully developing Venezuela's heavy-oil resources will require the deep pockets and technical expertise only the largest oil companies can offer.
Source: The Wall Street Journal
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