WASHINGTON: US President Donald Trump met with executives from some of the world’s largest oil companies at the White House on Friday to discuss Venezuela and said he wants them to invest $100 billion in the country to greatly expand its production.
Trump has named oil as the priority of his strategy for the South American nation after US forces captured its leader Nicolás Maduro in a nighttime raid on his capital on January 3.
“American companies will have the opportunity to rebuild Venezuela’s deteriorating energy infrastructure and eventually increase oil production to levels never seen before,” Trump said at the opening of the meeting.
He was flanked by top executives from Exxon Mobil, ConocoPhillips, Chevron Corp and others.
“We are going to make the decision on which oil companies are going to participate,” said the Republican president.
He praised an agreement with Venezuela’s interim leaders to provide 50 million barrels of crude oil to the United States, where numerous 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 is even lower energy prices,” he said.
U.S. forces have continued to detain Venezuelan oil tankers at sea to enforce an embargo. The fifth such seizure was announced on Friday.
Trump administration officials have said they need to monitor Venezuelan oil sales and revenues indefinitely to ensure the country acts in U.S. interests, including by reducing corruption and drug trafficking.
Some Democratic lawmakers have criticized this approach as extortion. Industry analysts have also warned of political instability as the country walks a fine line between denouncing Maduro’s capture and appeasing the United States.
“Not investable”
Companies such as Chevron, Vitol and Trafigura are competing for US licenses to market Venezuela’s existing crude oil, 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 considers Venezuela to be currently “uninvestable” and needs to see significant changes to return there.
“We’ve had our assets seized there twice, so you can imagine going back in 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, these changes can be implemented,” he said.
Exxon and ConocoPhillips left Venezuela almost 20 years ago after their assets were nationalized.
Chevron Vice President Mark Nelson said the company is committed to investments in Venezuela. Chevron is the only major American oil company still operating in the country.
Several smaller, private equity-backed independent players were also invited to the meeting, including some with ties to Energy Secretary Chris Wright’s home state of Colorado. Many of those executives 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 production in Venezuela, an OPEC member that has the world’s largest oil reserves but accounts for only about 1% of global supply.
Venezuela pumped up to 3.5 million barrels a day in the 1970s, more than triple current levels.
Trump said at the meeting that the US would guarantee the physical and financial security of oil companies investing in Venezuela, but did not provide details.
On Friday morning, Energy Secretary Chris Wright said in an interview on fox news Ahead of talks at the White House, there is “a real possibility” that the United States could use its Export-Import Bank to help finance large oil projects in Venezuela. This could reduce financial risks for companies that decide to invest there.
Trump added that ongoing talks with oil companies are aimed at securing commitments.
“We have to get them to invest and then get their money back as quickly as possible,” Trump said. “And then we can divide it all between Venezuela, the United States and them. I think it’s simple. I think the formula is simple.”
