According to reports from CCTV News and other media outlets, the White House has requested major U.S. oil companies to invest heavily in Venezuela to repair its oil extraction infrastructure , according to information disclosed by the U.S. government on January 3 local time.
It is reported that officials have told U.S. oil company executives in recent weeks that if they "hope to receive compensation for drilling platforms, pipelines and other property confiscated by the Venezuelan government, they must be prepared to return to Venezuela now and invest heavily to revitalize its battered oil industry."
At the beginning of this century, the late Venezuelan President Hugo Chávez demanded that international oil companies cede more operational control to PDVSA (the Venezuelan state-owned oil company), but this was rejected by some companies. Subsequently, the Chávez government forcibly seized the assets of these companies.
American oil giant Chevron At the time, through negotiations, it was able to remain in Venezuela and form a joint venture with the Venezuelan state-owned oil company; while its competitor, ExxonMobil, was able to... and ConocoPhillips They then chose to withdraw and initiated international arbitration to claim damages.
In recent discussions with oil company executives, the U.S. government has made it clear that U.S. oil companies must invest their own funds to rebuild Venezuela's oil industry, which will be one of the prerequisites for them to eventually recover the debts owed due to the expropriation of assets.
Sources familiar with the matter say this investment will be substantial for companies like ConocoPhillips . For years, ConocoPhillips has been trying to recover approximately $12 billion in losses incurred during Chavez's administration due to the nationalization of assets. ExxonMobil has also initiated international arbitration to try and recover $1.65 billion.
oil industry People are taking a cautious attitude
Oil industry figures are taking a cautious approach to the Trump administration's call for American oil companies to invest in Venezuela, citing concerns about the uncertain prospects of rebuilding Venezuela's dilapidated oil fields and the ongoing political uncertainty in the country.
Sources say whether these companies will ultimately return to Venezuela will depend on how their executives, boards of directors, and shareholders assess the risks of reinvesting in Venezuela.
A ConocoPhillips spokesperson recently responded, saying, "ConocoPhillips is closely monitoring the situation in Venezuela and its potential impact on global energy supply and stability. It is too early to speculate on any potential future business activities or investments."
U.S. President Donald Trump stated at a press conference at his Mar-a-Lago resort in Florida on March 3 that major U.S. oil companies will travel to Venezuela. He claimed that these large U.S. oil companies will invest billions of dollars to repair Venezuela's severely damaged oil infrastructure and begin generating revenue for the United States.
Just hours before Trump claimed that American oil companies were preparing to return to Venezuela, the U.S. military arrested Venezuelan President Maduro.
Even if oil companies agree to return to Venezuela, it could take years for the country's oil production to recover significantly. Despite possessing some of the world's largest proven oil reserves, Venezuela's oil production has plummeted over the past decades due to mismanagement, lack of investment, and US sanctions.
Analysts point out that companies intending to return to Venezuela not only face uncertainty regarding the framework of local oil business contracts, but also need to address issues such as security risks and underdeveloped infrastructure. They also need to consider the legality controversy surrounding the US action to arrest Maduro, as well as the risk of prolonged political turmoil in the country.
As a founding member of the Organization of the Petroleum Exporting Countries (OPEC), Venezuela's daily oil production reached as high as 3.5 million barrels in the 1970s, accounting for more than 7% of global oil production at the time. After the 2010s, the country's daily oil production fell below 2 million barrels; and last year, its average daily production was only about 1.1 million barrels, reducing its share of global production to 1%.
(Article source: CLS)
