Oil Not Well: Why ExxonMobil and others think Venezuela’s current environment is ‘uninvestable’ | Business
When US President Donald Trump met senior oil executives to press for investment in Venezuela, the message from the White House was deliberately ambitious. Venezuela has the world’s largest proven oil reserves. Its political landscape, Trump argued, has shifted. With American backing and security guarantees, the country should once again become a major destination for US energy capital.The response from the oil industry was notably restrained.Executives did not dispute Venezuela’s resource potential. Instead, they pointed to a combination of legal uncertainty, economic risk and hard-earned experience that continues to make large-scale investment unattractive, even with presidential support.
A country rich in oil, poor in production
Venezuela’s oil numbers are striking. The country holds an estimated 303 billion barrels of proven reserves, roughly 17% of the global total, more than any other nation. In the late 1990s, it produced over 3 million barrels per day, ranking among the world’s leading exporters.Today, output has fallen to below 1 million barrels per day. Years of mismanagement, underinvestment, sanctions and infrastructure decay have hollowed out what was once one of the most sophisticated oil industries in the developing world.This collapse is central to the scepticism voiced by oil companies. Restoring production on a meaningful scale is not a matter of restarting wells. It would require rebuilding pipelines, upgraders, refineries, power supply and skilled manpower, all of which demand long-term capital commitments.
Trump’s argument: security, speed and scale
At the meeting, Trump urged companies to think big. He spoke of investments running up to $100 billion, promised “total security” for American firms and suggested deals could be finalised quickly. The broader geopolitical framing was also clear: US companies should move decisively to prevent China or Russia from expanding their footprint in Venezuela.From the administration’s perspective, Venezuela’s oil represents both an economic and strategic opportunity. For the companies in the room, however, the issue was not opportunity but risk.
ExxonMobil draws a clear boundary
The most direct assessment came from ExxonMobil. Its chief executive described Venezuela’s current investment environment as “uninvestable”. The comment reflected Exxon’s long institutional memory. The company has operated in Venezuela since the 1940s, and has seen its assets expropriated twice, most recently during the nationalisation wave under Hugo Chávez.For Exxon, whose projects often involve tens of billions of dollars and operate over 20 to 30 years, the absence of durable legal protections is decisive. The company indicated it could send a technical team to assess the condition of assets, but stopped well short of committing capital.The distinction matters. Technical assessments are reversible. Large upstream investments are not.
Chevron’s limited optimism
If Exxon articulated the industry’s red lines, Chevron illustrated what cautious engagement looks like. Chevron is already operating in Venezuela through joint ventures and special licences. At the meeting, it said production from its existing operations could increase by as much as 50% over the next 18 to 24 months.That figure, while significant, must be viewed in context. Chevron’s Venezuelan output remains a fraction of the country’s historical production. The projected increase reflects incremental improvements to existing assets, not the launch of new, capital-intensive projects.Chevron’s stance suggested that limited gains are possible where infrastructure and personnel are already in place, but that this does not justify a rapid expansion of exposure.
Conditional interest from others
Other companies struck a similar tone.Shell indicated it has several billion dollars’ worth of potential opportunities in Venezuela, but only if sanctions waivers and regulatory clarity are sustained over time. Without that certainty, the projects remain hypothetical. Oilfield services firms such as SLB expressed confidence in their ability to ramp up activity. Their optimism reflects a different risk profile. Service providers supply equipment and expertise and can scale operations more easily than producers who must commit capital to fields and infrastructure. Meanwhile, Continental Resources founder Harold Hamm, a close ally of Trump, described Venezuela’s reserves as a “real jewel” while declining to commit investment. The assessment captured the mood in the room: admiration without obligation.
Economics and risk still dominate
Beyond politics, the economics remain challenging. Much of Venezuela’s crude is heavy or extra-heavy, making it more expensive to extract and refine. Restoring production requires reliable access to diluents, functioning upgraders and stable export logistics. Industry estimates suggest that reviving Venezuela’s oil sector at scale would require tens of billions of dollars in upfront investment, with returns spread over decades. At a time when oil companies have access to lower-cost, lower-risk projects elsewhere, particularly in parts of South America and offshore developments, Venezuela struggles to compete on risk-adjusted returns.
What the meeting revealed
The White House meeting did not produce the sweeping commitments Trump had hoped for. Instead, it clarified the industry’s position. Oil companies are not disputing Venezuela’s resource base. They are questioning whether the legal, regulatory and political environment is stable enough to support long-term investment. Exxon wants structural reform before capital. Chevron will optimise what it already operates. Shell wants sustained sanctions clarity. Service companies are ready to engage, but operators remain cautious.
The bottom line
Venezuela’s vast oil reserves are beyond doubt. What remains uncertain is whether the conditions needed to attract large, long-term investment can be put in place and sustained. Until oil companies are confident that contracts will be enforced, policies will remain predictable and political shifts will not undo commercial agreements, interest is likely to remain measured and capital deployment limited. The meeting underscored that for Big Oil, enthusiasm follows stability, not the other way around.
