Donald Trump may be eager to bring Venezuelan oil back into the global spotlight, but America’s biggest oil companies are far less enthusiastic.
While the US President has spoken confidently about American firms rebuilding Venezuela’s oil industry, industry executives and analysts say the ground reality tells a very different story. Low oil prices, political uncertainty and Venezuela’s troubled history with foreign companies are making Big Oil wary of large investments, a CNN analysis points out.
Venezuela holds the world’s largest proven oil reserves, more than Iraq, Russia and the US combined. Yet oil companies do not invest based on reserves alone. They need long-term political stability, clear laws and confidence that contracts will be respected.
That confidence is missing in Venezuela. Industry sources say there is little clarity on how the country will be governed in the coming years, making it hard to commit capital that could take decades to recover.
For oil companies, restarting production in Venezuela is not a quick project. It would require sustained investment and stable policies over many years — something executives are not ready to assume.
Years of economic collapse, sanctions and under-investment have left Venezuela’s oil infrastructure in poor shape. Even maintaining current production of around 1.1 million barrels per day would need investments of about $53 billion over the next 15 years, an estimate notes.
To restore output to its late-1990s peak of 3 million barrels per day, total spending would need to reach a massive $183 billion by 2040. Much of Venezuela’s crude is heavy oil, which is costlier and harder to refine than the lighter shale oil produced in the US.
Oil prices fell nearly 20 percent last year, making risky investments even less attractive. While cheaper crude benefits consumers, it discourages oil companies from betting on unstable regions.
Analysts say expectations of a rapid revival of Venezuela’s oil sector are unrealistic under current market conditions.
Among US companies, Chevron is best positioned. It is the only major Western oil firm that has maintained a significant presence in Venezuela and currently produces about 1,50,000 barrels per day under a US sanctions licence. However, Chevron has not publicly committed to expanding production.
ExxonMobil and ConocoPhillips have the expertise and financial strength to operate in Venezuela, but both companies had assets seized during Hugo Chavez’s nationalisation drive. Conoco is still seeking around $12 billion in compensation, while Exxon is pursuing nearly $2 billion.
With safer opportunities available — including Exxon’s major success in neighbouring Guyana — Venezuela is no longer seen as an unavoidable destination.
For Big Oil, the message is clear: Venezuela’s oil riches alone are not enough.
