Oil Producers Need Guarantees to Work in Venezuela, Trump Ally Hamm Says

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Shale billionaire Harold Hamm said oil companies need guarantees that their assets won’t someday be seized by Venezuela if they help revive the nation’s crude production.

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“There is a lot of geopolitical risk in Venezuela. Exxon had been there twice and been nationalized, ” Hamm said in an interview Thursday with Bloomberg Television. “There have got to be guarantees against that. We have seen other companies burned real bad there.”

Hamm, one of the oil industry’s most outspoken supporters of US President Donald Trump, said Venezuela is a much safer place as a result of the US removing former President Nicolás Maduro from power. The wildcatter was part of a group of oil executives who met with Trump at the White House last week to talk about boosting output in the South American nation, home to some of the world’s largest crude reserves.

Trump has called on US oil companies to invest at least $100 billion in order to revive production in Venezuela after years of corruption, underinvestment and neglect ravaged output. Crude producers, however, are moving cautiously. Exxon Mobil Corp. Chief Executive Officer Darren Woods told Trump at the meeting that the country is currently “uninvestable.”

Guarantees against Venezuela nationalizing US oil assets should come in the form of physical security but shouldn’t need to include financial assurances, Hamm said in a separate phone interview Thursday. As for companies that have had their assets in the country nationalized, “I’m sure they’re pretty dang cautious,” he added.

Asked if his Oklahoma City-based company, Continental Resources Inc., planned to enter Venezuela, Hamm told Bloomberg Television that he was monitoring the geopolitical situation and looking at the geology.

“That is what I have related to the president, and I think a lot of other executives did the same thing,” he said, adding in the later phone interview that he hasn’t specifically studied the shale rock that underlies Venezuela.

“Nobody knew this was coming,” Hamm said of Venezuela’s reopening to the global oil market.

— With assistance from Lisa Abramowicz