By Sheila Dang and Jarrett Renshaw
Washington — ExxonMobil CEO Darren Woods said on Friday the US oil major is ready to evaluate a potential return to Venezuela in what would be a stunning development after its assets in the South American country were nationalised nearly 20 years ago.
Woods, however, said Venezuela is currently “uninvestable” and significant legal changes are needed. The comments came during a White House meeting with President Donald Trump that was hastily arranged less than a week after American forces captured and removed Nicolás Maduro from power in a brazen overnight raid.
“It’s absolutely critical in the short term that we get a technical team in place to assess the current state of the industry and the assets, understand what will be involved to help the people of Venezuela get production back on the market,” Woods said, adding that the visit could happen once appropriate security guarantees are in place.
He told Trump that Exxon needs the introduction of durable investment protections and the country’s hydrocarbons law needs to be reformed.
Assets seized
“We’ve had our assets seized there twice. 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 CEO said.
Chevron vice-chair Mark Nelson, who was seated next to Trump adviser Stephen Miller, highlighted the company’s 100-year history in Venezuela and its status as the only American oil major currently operating there. He said the company is ready to increase liftings at its joint ventures with state oil company PDVSA by 100% immediately.
We’ve had our assets seized there twice. 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
— Darren Woods, ExxonMobil CEO D
“We are also able to increase our production within our own disciplined investment schemes by about 50% just in the next 18 to 24 months,” Nelson said.
Expropriations
Exxon, ConocoPhillips and Chevron were for decades the most prominent partners of PDVSA, contributing to developing output at the vast Orinoco Belt, which is now the country’s main oil region.
The government of late president Hugo Chavez nationalised the industry between 2004 and 2007, and while Chevron negotiated deals to partner with PDVSA, ConocoPhillips and Exxon left the country and filed for prominent arbitration cases shortly after.
Venezuela now owes over $13bn collectively to Conoco and Exxon for the expropriations. Conoco has tried to seize PDVSA’s foreign assets and is participating in the Delaware auction of Venezuelan-owned Citgo Petroleum’s parent to recover part of the money.
ConocoPhillips CEO Ryan Lance, who also attended the meeting, said that PDVSA may need to be restructured if he were to consider a possible return to the country.
He said banks, including Exim Bank, need to be involved in any discussions to deliver the financing and the billions of dollars needed to repair the energy infrastructure.
Lance told Trump that ConocoPhillips is one of the largest non-sovereign creditors of Venezuela.
“You’ll get a lot of your money back,” Trump told Lance, adding that he envisions starting with an “even plate” and not looking at what people lost in the past.
