U.S. Government to Meet Oil Executives as Talks on Rebuilding Venezuela’s Oil Industry Gain Momentum

Uncertainty Over Corporate Investment Amid Venezuela's Political Instability

Chris Wright, U.S. Secretary of Energy, is scheduled to meet with executives from oil companies this week to discuss plans for rebuilding Venezuela's oil industry, Bloomberg reported on the 5th (local time). This move comes as the Donald Trump administration, following the surprise arrest of Venezuelan President Nicolas Maduro on the 3rd, is stepping up efforts to secure control over Venezuela’s oil sector.

Chris Wright, U.S. Secretary of Energy. Photo by Reuters Yonhap News

According to Bloomberg, Secretary Wright is expected to attend the Goldman Sachs Energy, Clean Technology, and Utilities Conference in Miami, Florida, this week. The event will be attended by senior executives from major oil companies such as Chevron and ConocoPhillips. Notably, Chevron is currently the only American oil company still operating in Venezuela. Sources said that Secretary Wright plans to use this event as an opportunity to discuss Venezuela-related matters with these company executives.

Venezuela holds the world’s largest crude oil reserves, with more than 300 billion barrels. However, under the successive administrations of former President Hugo Chavez and President Maduro, oil production has plummeted due to the nationalization of the oil industry, U.S. sanctions, and the aging of oil infrastructure.

After declaring the nationalization of the oil industry in 2007, former President Chavez seized assets invested by ExxonMobil and ConocoPhillips. Both companies subsequently withdrew from the country.

At a press conference on the 3rd, President Trump stated that much of Venezuela’s oil infrastructure was built by American companies, adding, "Large U.S. oil companies will go in, invest billions of dollars to restore the severely damaged oil infrastructure, and start making money." This is interpreted as an intention to recover the losses previously incurred by American companies and to gain control over Venezuela’s oil sector through reinvestment in oil infrastructure.

There are concerns about how actively companies will participate in this venture, given the considerable risks involved. Observers point out that the political instability in Venezuela may cause companies to remain cautious, as committing to large-scale, long-term investments would require a stable environment.

Secretary of State Marco Rubio said in a CBS interview the previous day, "Venezuela does not have the capability to revive its oil industry on its own," adding, "Private sector investment is necessary, but these companies will only invest if certain guarantees and conditions are met."