Trump Promises Oil CEOs 'Total Safety' if They Invest in Venezuela

Donald Trump assured oil companies of “total safety, total security” in Venezuela to encourage a $100 billion investment in the nation's infrastructure following the ousting of Nicolás Maduro by US forces.

At a White House press conference, the president emphasised that Maduro’s arrest offers American oil companies, including Chevron and ExxonMobil, a significant opportunity for extraction.

Several oil executives supported the administration's actions in Venezuela and indicated their willingness to invest.

Trump's Forecasts on Venezuela's Oil Output

Analysts doubt that oil companies will invest as quickly as President Trump suggests. He predicted that Venezuela could increase oil production significantly within 18 months, claiming the U.S. would benefit from lower energy prices and that Venezuela would thrive, with Americans as major beneficiaries.

Notably, Trump indicated that the investment would come from oil companies rather than the federal government, stating, “The plan is for them to spend, meaning our giant oil companies will be spending at least $100bn of their money.” He stressed that while these companies do not need government funding, they require protection and security from the government.

Besides, Trump cautioned executives that there are alternatives willing to take their positions if they show disinterest in rebuilding efforts. He provided assurances of “total safety” but explained that some oil companies might not require government assistance, remarking that their operations are in challenging environments, some more severe than Venezuela.

Later that day, Trump signed an executive order to prevent courts or creditors from seizing revenue from Venezuelan oil sales in US treasury accounts, stating that such funds should be utilised in Venezuela to promote “peace, prosperity and stability.”

Oil Executives' Readiness for Rebuilding

ExxonMobil and ConocoPhillips possess longstanding claims against Venezuela due to the nationalisation of their assets nearly 20 years ago, with billions still owed to them. Recently, oil executives indicated a readiness to assist in rebuilding Venezuela's oil infrastructure, pending assurances from the US government.

Chevron's vice-chair, Mark Nelson, highlighted the company's dedication to Venezuela, reporting 3,000 employees across four joint ventures and the potential to immediately double oil export capacity. He acknowledged Chevron's historical significance in the region and expressed optimism for future contributions.

Darren Woods, CEO of Exxon, stated that reinvesting in Venezuela necessitates “significant changes” to its legal and commercial frameworks, deeming the situation as currently “uninvestable.” He noted optimism for these changes with collaboration from the Trump administration and the Venezuelan government.

ConocoPhillips CEO Ryan Lance expressed cautious optimism about restoring Venezuela's quality over the past 25 years, citing the company's status as the largest non-sovereign creditor with $12 billion in debt owed. He highlighted assurances from Trump regarding debt recovery and emphasised a shift towards future financial gains, attributing past losses to previous leadership.

Venezuela's Oil Sector Amid Economic Troubles & Political Unrest

Venezuela, known for having the world's largest oil reserves, saw a significant boom in its oil industry during the late 90s and early 2000s. However, after Hugo Chávez reestablished state control over the industry in the mid-2000s, oil production significantly declined due to aging infrastructure and lack of investment.

Maduro is facing trial in US federal court on “narco-terrorism” charges, while Trump expresses strong support for Venezuela's reopening to the American oil industry. The White House announced plans to control Venezuela's oil “indefinitely” and to sell billions of dollars' worth of recently seized crude oil.

In closing, foreign intervention over the past two decades has influenced oil output in various countries, often with inconsistent outcomes. Currently, there is a global surplus of oil, leading to an average decline of approximately $0.25 in US gas prices compared to the previous year.

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