Exxon says Venezuela is currently ‘uninvestable’
ExxonMobil’s chief executive Darren Woods said Venezuela is “uninvestable” without “significant changes”, striking a sceptical tone over Donald Trump’s call for a flood of investment.
The head of the biggest US oil company said he was ready to put a technical team on the ground within weeks to assess opportunities in Venezuela.
But Woods shied away from the president’s call for companies to strike deals to invest in the country’s energy sector as soon as “today”.
“If we look at the legal and commercial constructs, frameworks in place today in Venezuela today, it’s uninvestable, and so significant changes have to be made to those commercial frameworks, the legal system,” Woods said.
“We first got into Venezuela back in [the] 1940s, we’ve had our assets seized there twice,” he added. “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 Exxon chief said companies would need to carefully assess the potential for returns before making any commitments to invest in Venezuela.
“The questions will ultimately be how durable are the protections from a financial standpoint? What do the returns look like? What are the commercial arrangements, the legal frameworks?” Woods said.
“All those things have to be put in place in order to make a decision to understand what your return would be over the next several decades, that these billion dollar investments will be made on.”
The FT reported earlier this week that the oil industry was unlikely to make big investments in Venezuela without legal, financial and security assurances from Washington.
Trump on Friday vowed that the US oil industry would be provided with “total security” and other guarantees, but he did not offer specifics on what would be offered.
“There has to be durable investment protections, and there has to be change to the hydrocarbon laws in the country,” Woods said.
Shell is ‘ready to go’ if US grants Venezuela licences
Shell is “ready to go” and has “a few billion dollars of opportunities” in Venezuela to invest in if it is granted licences by the US, chief executive Wael Sawan said.
“When we left in the 1970s because of nationalisations, we had a million barrels per day of production,” Sawan told Donald Trump.
“But we have kept boots on the ground in Venezuela all this time, and we now have a few billion dollars worth of opportunities to invest in” subject to a sanctions waiver from US authorities.
“So we are ready to go and looking forward to the investments, in support of the Venezuelan people.”
Trump says he hopes no financial backstop needed for oil companies to go back into Venezuela
Donald Trump said he hoped he didn’t have to give a financial backstop to oil companies to persuade them to go back into Venezuela.
“I hope I don’t have to give a backstop. Look, these are very smart people . . . These are the biggest companies in the world sitting around this table,” the president said.
“They know the risks. I mean, there are risks. We’re going to help them out. We’re going to make it real easy. They’re going to be there for a long time,” he added.