Trump says US companies poised to rebuild Venezuela’s oil industry

US President Donald Trump said major American oil companies are ready to invest in Venezuela and spend billions of US dollars to restore the country’s crude oil output after President Nicolas Maduro was arrested by US forces and removed from power.

According to Post Today, Trump said some of the world’s largest US oil firms would move in to repair Venezuela’s badly degraded energy infrastructure and restart production in order to generate revenue for the country.

“We will let the biggest US oil companies go in, invest, spend billions of dollars, fix the oil infrastructure that has been severely damaged, and start generating income for the country,” he said.

At present, Chevron is the only US oil company still operating in Venezuela’s oilfields, producing heavy crude used by refineries on the US Gulf Coast and elsewhere. Other major US firms, such as Exxon Mobil and ConocoPhillips, once played significant roles in Venezuela’s oil industry before projects were nationalised under former president Hugo Chavez nearly two decades ago.

Francisco Monaldi, director of the Latin America energy programme at Rice University’s Baker Institute in Houston, said other US oil companies would likely wait to assess political stability, the operating environment and contractual frameworks before deciding whether to invest. 

He said ConocoPhillips was the most likely to return, as it is still owed more than US$10 billion by Venezuela and has little chance of being repaid unless it resumes operations in the country. Exxon Mobil could also return, though it is owed a smaller amount.

The legacy of past nationalisations remains a key risk factor. ConocoPhillips is still seeking billions of dollars in compensation over the seizure of three oil projects almost 20 years ago, while Exxon Mobil previously entered international arbitration with Venezuela after withdrawing its investment in 2007.

Chevron, which exports around 150,000 barrels per day of Venezuelan crude to the United States, has had to manage relations with the Trump administration cautiously in recent years. 

In February, Trump revoked a licence previously issued under President Joe Biden that allowed Chevron to export Venezuelan oil. In July, the licence was reinstated on a limited basis, allowing the company to operate and swap oil, on condition that proceeds from sales were not transferred to the Maduro government.

A Chevron spokesperson said the company continues to operate in strict compliance with all relevant laws and regulations.

Analysts say Trump’s plan to have US firms revive Venezuela’s oil production will face major obstacles due to infrastructure shortages, requiring years of work and substantial capital. 

Peter McNally, Third Bridge’s head of industrial analysis, said Venezuela’s oil industry would need investment in the tens of billions of dollars and could require at least a decade of sustained commitment from Western oil companies.

Trump also stressed that US oil sanctions on Venezuela remain fully in place, and that US military forces would stay deployed until Washington’s demands are fully met.

“US forces remain in position, and the United States retains every military option until our demands are fully met,” Trump said.

A tanker chartered by Chevron has been among the few able to depart Venezuela in recent weeks, after Trump announced a “blockade” of all sanctioned oil tankers.

Venezuela, which holds the world’s largest proven oil reserves, exported an average of about 921,000 barrels per day in November, sharply down from production of 3.2 million barrels per day in 2000, according to the US Energy Information Administration (EIA).