Venezuela's Oil Promise: U.S. Giants Urge Caution Amid Political Shifts
In a week marked by earnings calls and heightened geopolitical focus on Caracas, the CEOs of ExxonMobil and Chevron struck a uniformly cautious tone on Friday regarding near-term expansion in Venezuela, emphasizing that legal and fiscal stability must precede any major investment shift.
ExxonMobil CEO Darren Woods, whose company's assets were nationalized in 2007, told CNBC that the priority is helping the administration understand the necessity of a "sound legal framework" in Venezuela. His comments follow a tense January meeting at the White House, where President Donald Trump reportedly jeered Woods's characterization of the country as currently "uninvestable" due to past expropriations.
"Our experience has taught us that the significant challenges on the ground must be addressed to achieve the energy priorities the White House has outlined," Woods said, referencing the company's ability to handle Venezuela's heavy crude, similar to its Canadian operations.
Meanwhile, Chevron CEO Mike Wirth—whose firm is the sole U.S. oil major still operating in Venezuela—stressed on an analyst call that while the country "has the opportunity to become a more sizable part of our portfolio," predictability is key. "We need to see stability and have confidence in the fiscal regime," he stated. Chevron currently produces over 200,000 barrels per day there and sees potential for growth up to 50% within two years, pending favorable conditions.
The statements come as Venezuela's parliament adopted a new hydrocarbon law Thursday, offering greater private-sector guarantees, reduced state control in exploration, and lower taxes—a move analysts see as aimed at attracting foreign investment. Wirth confirmed Chevron is reviewing the legislation, noting that "with the right changes, we certainly could see our operations and footprint expand."
Both companies reported lower quarterly profits due to falling crude prices, though increased production offered some offset. ExxonMobil's profit fell 14.6% to $6.5 billion, while Chevron's dropped 14.5% to $2.8 billion.
Reaction & Analysis:
"This is classic Big Oil risk management," says Michael Rodriguez, an energy analyst at Global Insights. "They're publicly aligning with White House objectives while privately insisting on ironclad guarantees. The new hydrocarbon law is a step, but enforcement history matters more."
Linda Chen, a portfolio manager focused on emerging markets, adds: "Chevron's existing footprint gives it a strategic advantage, but Exxon's trauma from 2007 is palpable. Their caution is less about geology and more about rule of law."
More pointedly, David Fletcher, a former oil executive turned industry critic, fumes: "It's hypocrisy dressed as prudence. They've profited from instability elsewhere for decades. Now they suddenly need 'predictability' in Venezuela while lobbying for sanctions that undermine it. This is about maximizing leverage, not minimizing risk."
Finally, Maria Silva, a Caracas-based economist, observes: "The government's reforms are a direct response to this pressure. But for locals, the debate between 'uninvestable' and 'opportunity' feels distant when the immediate need is rebuilding the country's basic infrastructure and oil output capacity."