Venezuela's Oil Sector: Exxon, Chevron Signal Cautious Interest Amid Political Shifts
By Sheila Dang
HOUSTON, Jan 30 (Reuters) – The prospect of a revitalized Venezuelan oil industry drew measured, yet notably softened, rhetoric from the chiefs of ExxonMobil and Chevron Corp on Friday. While stopping short of announcing new investments, their comments marked a subtle shift from outright dismissal to cautious, conditional interest, reflecting recent political upheaval and U.S. policy adjustments.
ExxonMobil CEO Darren Woods, who weeks prior labeled the country "uninvestable," pointed to the company's technological edge in potentially lowering the cost of extracting Venezuela's heavy crude. Across the call, Chevron CEO Mike Wirth outlined plans to incrementally process more Venezuelan oil through U.S. refineries. Both executives, however, anchored any long-term vision to the establishment of robust legal frameworks and durable political stability—conditions still absent despite the ouster of President Nicolas Maduro.
The discussions, which surfaced during fourth-quarter earnings calls dominated by geopolitical concerns, underscore the monumental challenge facing the Trump administration's push for up to $100 billion in U.S. investment to reboot Venezuela's crippled energy sector. Chevron remains the sole American major with active production in the country, while Exxon exited nearly two decades ago following nationalization.
Recent developments provide a fragile backdrop for the CEOs' tempered optimism. The U.S. Treasury has moved to ease certain sanctions, and Venezuela's National Assembly passed legislation aimed at granting more autonomy to private producers. Wirth stated Chevron could boost its gross Venezuelan production by roughly 50% in the short term and process an additional 100,000 barrels per day at its Gulf and West Coast refineries. "We're working with both governments to try to create circumstances that would enable [an expanded footprint]," he said, while cautioning it was "too early" for a long-term outlook.
Woods suggested the political shifts in Caracas could also indirectly benefit operations in neighboring Guyana, where Exxon and Chevron are partners in the massive Stabroek block. "Perhaps we'll see an opportunity for less naval patrols, that'll make it a little more friendly environment," he said, referencing a long-standing territorial dispute currently before the International Court of Justice that has placed parts of the block under force majeure.
Market Voices:
"This is the first crack in the wall of corporate skepticism," said Michael Arroyo, a Latin America energy analyst at Horizon Advisors. "They're not writing checks yet, but they're publicly mapping the conditions under which they might. That's a significant step from the total silence of recent years."
Linda Feldman, a portfolio manager with Greenrock Capital, was more skeptical. "It's cheap talk for the earnings call. Until I see a rig moving into Lake Maracaibo or a final investment decision on a multi-billion dollar project, this is just noise. The legal and political quagmire is far from resolved."
Carlos Rivas, a former PDVSA engineer now based in Houston, offered a poignant perspective. "Every word of caution from these CEOs echoes the fears of Venezuelans who've seen promises come and go. Yes, the potential is astronomical, but so is the human and institutional devastation. Rebuilding trust will take much more than eased sanctions."
Raj Patel, a risk consultant, struck a pragmatic note. "The Guyana angle is telling. It shows their primary focus remains secure, high-return jurisdictions. Venezuela is a speculative side bet—a huge one—but a side bet nonetheless. Their real commitment will be measured in patience, not just capital."
(Reporting by Sheila Dang in Houston; Editing by Nathan Crooks and Daniel Wallis)