According to information disclosed by the U.S. side on January 3, local time, the White House has requested major American oil companies to invest heavily in Venezuela to repair the country’s crude oil extraction infrastructure.
Reportedly, officials have told oil executives in recent weeks that if they “hope to receive compensation for drilling rigs, pipelines, and other property seized by the Venezuelan government, they must be prepared to return to Venezuela now and invest on a large scale to revitalize its battered oil industry.”
At the beginning of this century, the late Venezuelan President Hugo Chávez demanded that international oil companies cede more operational control to the state-owned Petróleos de Venezuela (PDVSA). Some companies refused, leading the Chávez government to forcibly expropriate their assets.
At the time, U.S. oil giant $Chevron (CVX) managed to stay in Venezuela through negotiations, forming joint ventures with PDVSA. In contrast, its competitors $Exxon Mobil (XOM) and $ConocoPhillips (COP) chose to exit the country and filed for international arbitration to seek damages for their losses.
In recent discussions with oil executives, the U.S. government has made it clear that American oil companies must first commit their own funds to rebuild Venezuela’s oil industry. This investment will be a prerequisite for eventually recovering the debts related to the expropriated assets.
Sources familiar with the matter stated that for companies like ConocoPhillips, this investment would be extremely costly. For years, ConocoPhillips has been attempting to recover approximately $12 billion in losses resulting from the nationalization of assets during the Chávez era. ExxonMobil has similarly pursued international arbitration to recover $1.65 billion.
Caution Within the Oil Industry
Oil industry insiders are maintaining a cautious stance regarding the Trump administration’s demand for investment in Venezuela. They are concerned about the uncertain prospects of rebuilding Venezuela’s dilapidated oil fields and the political instability that may persist in the country for some time.
Sources say that whether these companies ultimately return to Venezuela will depend on how executives, boards of directors, and shareholders assess the risks of re-investment.
A spokesperson for ConocoPhillips responded recently, stating: “ConocoPhillips is closely monitoring developments in Venezuela and their potential impact on global energy supply and stability. At this time, it is premature to speculate on possible future business activities or investments.”
On January 3, during a press conference at Mar-a-Lago in Florida, President Trump stated that major U.S. oil companies would be heading to Venezuela. He claimed he would have America’s massive oil firms invest billions of dollars to repair Venezuela’s severely deteriorated oil infrastructure and begin “generating revenue” for the United States.
Trump’s assertion that U.S. oil companies were preparing to return to Venezuela came just hours after U.S. forces captured Venezuelan President Nicolás Maduro.
Even if oil companies agree to return, it could take years for the country’s oil production to see a significant recovery. Despite possessing some of the world’s largest proven oil reserves, Venezuela’s production has plummeted over the past few decades due to a combination of mismanagement, lack of investment, and U.S. sanctions.
Analysts point out that companies interested in returning face not only uncertainties regarding local oil contract frameworks but also security risks, backward infrastructure, and legal controversies surrounding the U.S. capture of Maduro—all alongside the risk of prolonged political upheaval.
As a founding member of the Organization of the Petroleum Exporting Countries (OPEC), Venezuela produced as much as 3.5 million barrels of oil per day in the 1970s, accounting for over 7% of total global production at the time. By the 2010s, daily production fell below 2 million barrels; last year, average daily production was only about 1.1 million barrels, dropping its share of global production to just 1%.