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Exxon demands security before sending team to Venezuela; investments in Venezuela’s hydrocarbon laws need reform; Woods says Chevron is preparing to increase production immediately
Jan 9 (Reuters) – ExxonMobil Chief Executive Darren Woods said on Friday the U.S. oil giant was ready to evaluate a possible return to Venezuela, a surprising development after ExxonMobil’s assets in South America were nationalized nearly two decades ago.
But Woods said Venezuela is currently “uninvestable” and requires significant legal reform. The comments were made during a hastily arranged White House meeting with US President Donald Trump less than a week after US forces captured Venezuelan President Nicolás Maduro and removed him from power in a brazen nighttime raid.
“In the short term, it is critical that we have a technical team in place to assess the current state of the industry and assets and understand what the Venezuelan people need to bring production back to market,” Woods said, adding that the visit could happen if the right security is in place.
He told Trump that Exxon needs permanent investment protections in place and that the country’s hydrocarbon laws also need to be revised.
“We’ve had assets seized there twice before, so you can imagine that re-entering the country a third time would require some pretty significant changes from what we’ve seen here and where we are now,” he said.
Chevron Vice Chairman Mark Nelson, sitting next to Trump advisor Stephen Miller, highlighted the company’s 100-year history in Venezuela and its status as the only U.S. oil major currently operating there. He said the company was ready to immediately increase the lift capacity in its joint venture with state oil company PDVSA by 100%.
“Also, within our own disciplined investment plan, we can increase production by approximately 50% over the next 18 to 24 months,” Nelson said.
ConocoPhillips seeks bank involvement
Exxon, ConocoPhillips and Chevron have been the most prominent partners of state-run company PDVSA for decades, helping develop production in the vast Orinoco Belt, now the country’s main oil region.
The government of the late President Hugo Chávez nationalized the industry from 2004 to 2007, and while Chevron was negotiating to partner with PDVSA, ConocoPhillips and Exxon left the country and filed high-profile arbitration cases soon after.
Venezuela currently owes Conoco and Exxon a combined total of more than $13 billion for expropriation. Conoco is seeking to seize PDVSA’s overseas assets and is participating in a Delaware auction of Venezuelan-owned Citgo Petroleum’s parent company to recover some of the funds.
ConocoPhillips CEO Ryan Lance also attended the meeting and said PDVSA may need to be restructured if it considers returning to the country.
He said banks, including the Export-Import Bank, should be involved in any discussions to provide the financing and billions of dollars needed to repair energy infrastructure.
Lance told President Trump that ConocoPhillips is one of Venezuela’s largest non-sovereign creditors.
“There’s going to be a lot of money back,” Trump told Lance, adding that he envisions people starting with an “even plate,” not looking at what they lost in the past.
Reporting by Bo Erickson and Jarrett Renshaw in Washington and Sheila Dunn and Marianna Paraga in Houston; Editing by Nia Williams, Nathan Crooks and Bill Berkrot
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