WASHINGTON: US President Donald Trump met with executives from some of the world’s biggest oil companies at the White House on Friday to discuss Venezuela, saying he wants them to invest $100 billion in the country to vastly expand its production.
Trump has singled out oil as a priority for his strategy for the South American nation after US forces seized its leader Nicolas Maduro in an overnight raid in the country’s capital on January 3.
“American companies will have the opportunity to rebuild Venezuela’s decaying energy infrastructure and ultimately increase oil production to levels never before seen,” Trump said at the opening of the meeting.
He was flanked by top executives from Exxon Mobil, ConocoPhillips, Chevron Corp and others.
“We have to make the decision about which oil companies are going to go in,” the Republican president said.
He praised an agreement with Venezuela’s interim leaders to supply 50 million barrels of crude oil to the United States, where several refineries are specially equipped to refine it. Trump said he expects such deliveries to continue indefinitely.
“One of the things the United States will get out of this will be even lower energy prices,” he said.
US forces have continued to seize Venezuelan oil tankers at sea to enforce an embargo. The fifth seizure was announced Friday.
Trump administration officials have said they need to indefinitely control Venezuela’s oil sales and revenues to ensure the country acts in US interests, including by reducing corruption and drug trafficking.
Some Democratic lawmakers have criticized this approach as blackmail. Industry analysts have also warned of political instability as the country treads a fine line between condemning Maduro’s capture and appeasing the U.S.
“Uninvestable”
Companies including Chevron, Vitol and Trafigura are competing for US licenses to market Venezuela’s existing crude, but oil majors are hesitant to commit to large, long-term investments in Venezuela due to high costs and political instability.
Exxon CEO Darren Woods said at the White House meeting that the company sees Venezuela as currently “uninvestable” and would need to see significant changes to return there
“We’ve had our assets seized there twice and so you can imagine re-entry a third time would require some pretty significant changes,” he said.
“We are confident that with this administration and President Trump working hand in hand with the Venezuelan government that these changes can be implemented,” he said.
Exxon and ConocoPhillips left Venezuela nearly 20 years ago after their assets were nationalized.
Chevron Vice Chairman Mark Nelson said the company is committed to investing in Venezuela. Chevron is the only US oil major still operating in the country.
Several smaller independents and private equity-backed players were also invited to the meeting, including some with ties to Colorado, Energy Secretary Chris Wright’s home state. Many of these leaders praised Trump for his policies toward Venezuela and said they were prepared to invest in the country and market its oil.
Decades of underinvestment have eroded output in Venezuela, an OPEC member that boasts the world’s largest oil reserves but accounts for only about 1% of global supply.
Venezuela pumped as much as 3.5 million barrels a day in the 1970s, more than triple the current level.
Trump said at the meeting that the United States would guarantee the physical and financial security of oil companies investing in Venezuela, but did not provide details.
Friday morning, Energy Minister Chris Wright said in an interview about Fox News ahead of the White House talks, that there is “a real possibility” that the United States could use its Export-Import Bank to help finance major oil projects in Venezuela. This can reduce the financial risks for companies that decide to invest there.
Trump added that ongoing discussions with oil companies are aimed at securing commitments.
“We’ve got to get them to invest, and then we’ve got to get their money back as quickly as we can,” Trump said. “And then we can split it all up between Venezuela, the United States and them. I think it’s simple. I think the formula is simple.”
