Summary
- Exxon requires security guarantees before sending team to Venezuela
- Venezuela’s hydrocarbons law needs reform for investment, Woods says
- Chevron is preparing for an immediate bump in production
Jan 9 (Reuters) – Exxon Mobil CEO Darren Woods said on Friday the U.S. oil major is ready to evaluate a potential return to Venezuela in what would be a stunning development after its assets in the South American country were nationalized nearly 20 years ago.
Woods, however, said Venezuela was currently “uninvestable” and significant legal changes are needed. The comments came during a White House meeting with U.S. President Donald Trump that was hastily arranged less than a week after U.S. forces captured and removed Venezuelan President Nicolas Maduro from power in a brazen overnight raid.
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“It’s absolutely critical in the short term that we get a technical team in place to assess the current state of the industry and the assets, understand what will be involved to help the people of Venezuela get production back on the market,” Woods said, adding that the visit could happen once appropriate security guarantees were in place.
He told Trump that Exxon needed durable investment protections introduced and the country’s hydrocarbons law also needed to be reformed.
“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,” the CEO said.
Chevron Vice Chairman Mark Nelson, who was seated next to Trump adviser Stephen Miller, highlighted the company’s 100-year history in Venezuela and its current status as the only American oil major currently operating there. He said the company is ready to increase liftings at its joint ventures with state oil company PDVSA by 100% immediately.
“We are also able to increase our production within our own disciplined investment schemes by about 50% just in the next 18 to 24 months,” Nelson said.
CONOCOPHILLIPS CALLS FOR BANK INVOLVEMENT
Exxon, ConocoPhillips and Chevron were for decades the most prominent partners of state company PDVSA, contributing to developing output at the vast Orinoco Belt, which is now the country’s main oil region.
The government of late President Hugo Chavez nationalized the industry between 2004 and 2007, and while Chevron negotiated deals to partner with PDVSA, ConocoPhillips and Exxon left the country and filed for prominent arbitration cases shortly after.
Venezuela now owes over $13 billion collectively to Conoco and Exxon for the expropriations. Conoco has tried to seize PDVSA’s foreign assets and is participating in the Delaware auction of Venezuela-owned Citgo Petroleum’s parent to recover part of the money.
ConocoPhillips CEO Ryan Lance, who also attended the meeting, said that PDVSA may need to be restructured if he were to consider a possible return to the country.
He said banks – including Exim Bank – need to be involved in any discussions to deliver the financing and the billions of dollars needed to repair the energy infrastructure.
Lance told Trump that ConocoPhillips is one of the largest non-sovereign creditors of Venezuela.
“You’ll get a lot of your money back,” Trump told Lance, adding that he envisioned starting with an “even plate” and not look at what people lost in the past.
Reporting by Bo Erickson and Jarrett Renshaw in Washington and Sheila Dang and Marianna Parraga in Houston, Editing by Nia Williams, Nathan Crooks and Bill Berkrot
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