U.S. President Donald Trump wants to bring Venezuelan oil back onto the American market quickly, but so far his plan isn’t working: The major U.S. oil companies — Chevron, ExxonMobil and ConocoPhillips — are demanding firm legal and financial guarantees before committing billions to rebuild Venezuela’s decaying oil infrastructure. Without such assurances, they see the risk as far too high, particularly in light of past expropriations and ongoing arbitration cases.
What exactly are the oil companies demanding?
• Legal safeguards, including protection against renewed expropriations and enforceable compensation in cases of political risk.
• Financial security, such as long-term off-take agreements or other mechanisms that guarantee profitability and stable demand.
• Protection for employees and facilities, given Venezuela’s political instability and security issues.
These demands put pressure on the U.S. government, because without them, investments in Venezuela are unlikely to move forward.
Trump places significant political and economic expectations on Venezuelan oil: The United States could diversify its energy supply and gain geopolitical leverage. But the oil market remains skeptical — partly because of Venezuela’s fragile infrastructure, and partly due to global oversupply and generally lower prices.
SK
