Big Oil Gives Venezuela Another Look

By
Richard C. Young
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By Taras Vykhopen @ Adobe Stock

After President Trump ordered a decapitation strike in Venezuela to arrest Nicolas Maduro and his wife and bring them to the United States to stand trial, a new relationship was built with the country’s new leadership, including acting president Delcy Rodriguez.

A wave of American and European oil companies has gone to Venezuela to attempt to reopen relations with the country and to either begin or restart operations there. At first, big oil companies like ExxonMobil and ConocoPhillips were not interested, deeming the country still too risky. But even those Big Oil companies have begun to nose around Venezuela looking for opportunities. The Wall Street Journal reports:

In recent weeks, both Exxon and Conoco have met with Venezuelan officials and sent technical teams to the Latin American country. Exxon’s team inspected the Cerro Negro heavy-oil project that it operated before 2007 when Hugo Chávez’s government nationalized much of the country’s energy infrastructure. Conoco is also trying to assess oil-and-gas opportunities.

You can see in the chart below that Venezuela has had a very difficult time raising the value of its oil exports after they peaked in 2008.

Mike Wirth, CEO of Chevron, the one big Western oil company that hadn’t abandoned Venezuela, discussed the country’s future with Margaret Brennan of Face the Nation. Wirth explained that the country is interested in more U.S. investment.

Yesterday, President Trump announced that the newly revived relationship between the United States and Venezuela was making money for both countries.