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By Hugh Cameron
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President Donald Trump has reiterated his desire for U.S. companies to help develop Venezuela’s natural resources following the ouster of President Nicolás Maduro, and threatened to sideline one oil major from this plan.
Speaking to reporters aboard Air Force One on Sunday, Trump said “a lot” of firms had committed to helping restore Venezuela's ailing energy sector, but said ExxonMobil, the largest oil company in the U.S, had so far been insufficiently enthusiastic about this effort.
“I didn’t like Exxon’s response. You know, we have so many that want in,” Trump said while en route to to Washington, D.C., from Palm Beach, Florida.
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“I’d probably be inclined to keep Exxon out. I didn’t like their response," he added. "They’re playing too cute."
During a roundtable with other oil executives at the White House on Friday, Exxon’s Chairman and CEO Darren Woods had called Venezuela “uninvestable” and said there would be significant and lengthy challenges involved in capitalizing on its natural resource endowment.
Newsweek contacted ExxonMobil’s press department for comment.
Why It Matters
Trump has publicly urged American firms—many of whom have in the past been burned in Venezuela—to return to the country and help tap into the largest proven oil reserves on the planet. The president has said the “tremendous amount of money” required to do so should come from U.S. companies—with the possibility of some government reimbursement—but there remain major hurdles to carrying out his plans, not least the apparent reluctance of some to enter the still-fragile market.
What To Know
Shortly after the capture of Maduro and his wife, Trump began previewing what he envisions as a breakneck, private sector-led development of Venezuela’s energy sector by U.S. firms.
"We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country," the president said during a press conference following the raid.
And on Friday afternoon, thepresident convened a roundtable with some of the country’s top oil executives—including leaders from Chevron, ExxonMobil and ConocoPhillips—to discuss the extraction opportunities he believes the operation has presented.
“It’s a whole different Venezuela,” Trump said. “Venezuela is going to be very successful and the people of the United states are going to be big beneficiaries because we’re going to be extracting numbers—in terms of oil—like few people have ever seen.”
The president also assured those present that they could expect “total safety, total security” in the country, but said that the oil giants are “not babies” and would be capable of securing their own projects.
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But some have expressed skepticism that U.S. firms will be eager to take part in what the president has said will be an 18-month, $100-billion effort to rapidly restore the country’s oil sector in light of the unclear political situation.
“If I were an oil company executive being pressured by Trump to invest billions of dollars of capital expenditures to revive Venezuela's oil infrastructure, I would want a regime in place committed to the rule of law,” former National Security Advisor John Bolton told Newsweek in an interview last week.
“I’ll just share a philosophy that ExxonMobil has when we enter countries—because we do business all around the world, in a number of different regimes—we take a very long‑term perspective,” ExxonMobil’s CEO told Trump at Friday’s event. “The investments that we make span decades and decades. So, we do not go into any opportunity with a short-term mindset.”
“If we look at the legal and commercial constructs—frameworks—in place today in Venezuela, today it’s uninvestable,” he later added. “And so significant changes have to be made to those commercial frameworks, the legal system, there has to be durable investment protections, and there has to be a change to the hydrocarbon laws in the country.”
Woods also noted his company’s troubled history in Venezuela, highlighting the two instances when governments nationalized the oil sector and expropriated its interests in major projects. This most recently occurred in 2007 under then-President Hugo Chávez, leading Exxon to leave the country and resulting in years of arbitration claims and major financial losses.
“They’re just not going to be eager to go in and deal with a regime that 20 years ago nationalized what was left of U.S. oil investments that earlier governments had nationalized in 1976,” Bolton told Newsweek last week.
What People Are Saying
President Trump, at the roundtable with energy executives on Friday, said: “The plan is for them to spend at least $100 billion of their money. Not the government money. They don't need government money but they need government protection and security that they spend all this money it's going to be there so they get their money back and make a very nice return. The plan is for them to spend at least $100 billion to rebuild the capacity and infrastructure necessary.”
ExxonMobil Chairman and CEO Darren Woods said: “With respect to Venezuela in particular, we have a very long history in Venezuela. In fact, we first got into Venezuela back in the 1940s. We've had our assets seized there twice. And so, you can imagine to re‑enter a third time would require some pretty significant changes from what we've historically seen here and what is currently the state.”
What Happens Next
On Sunday, when asked whether any oil companies had made commitments to him regarding the development of Venezuela’s resources, Trump replied: “A lot of them.”
Regarding “short term” changes that could pave the way for its re-entry, Exxon said it hoped to get a “technical team in place to assess the current state of the industry and the assets to understand what would be involved to help the people of Venezuela get production back on the market.”
“With the invitation of the Venezuelan government and with appropriate security guarantees, we are ready to put a team on the ground there,” the CEO said.
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