Trump says he's "inclined to keep Exxon out" of Venezuela after CEO's remarks
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President Trump during a meeting with oil and gas executives in the East Room of the White House on Jan. 9. Photo: Alex Wong/Getty Images
President Trump said Sunday he may exclude Exxon Mobil from his drive for U.S. companies to invest in Venezuela, after the oil giant's CEO described the South American country as "uninvestable."
What he's saying: "I didn't like Exxon's response," said Trump Sunday evening of the CEO's comments during his meeting with U.S. oil giants at the White House two days ago.
- "I'd probably be inclined to keep Exxon out. I didn't like their response," added the president aboard Air Force One en route to Washington, D.C., from Palm Beach, Florida. "They're playing too cute."
Context: Exxon CEO Darren Woods said in remarks delivered during Friday's meeting at the White House with Trump that the company had had its assets seized twice in Venezuela as the country moved to nationalize in recent decades.
- "You can imagine to re‑enter a third time would require some pretty significant changes from what we've historically seen here and what is currently the state," he said.
- "If we look at the legal and commercial constructs — frameworks — in place today in Venezuela, today it's uninvestable. And so significant changes have to be made to those commercial frameworks, the legal system, there has to be durable investment protections, and there has to be a change to the hydrocarbon laws in the country."
The big picture: The Trump administration wants American firms to play a key role in reviving oil production in Venezuela in the wake of this month's U.S. raid in Caracas that led to the capture of Venezuelan leader Nicolás Maduro.
- While Trump envisions companies from the U.S. and elsewhere spending $100 billion in Venezuela, Exxon and other oil giants appear more cautious on investing in the country again.
- Chevron, the only U.S. oil company with operations in Venezuela, can increase production "by about 50% just in the next 18 to 24 months, and that's just leveraging what's on the ground," said Chevron's vice chair Mark Nelson at Friday's White House meeting.
Of note: When asked Sunday what backstops or guarantees Trump had told the oil companies that his administration would provide, the president replied: "There's going to be no problem."
- Oil firms had experienced problems in the past "because they didn't have Trump as a president, they had stupid people," he added.
- Trump has said that U.S. firms would have security guarantees, but he has yet to provide details on this plan or commit to a U.S. military presence.
Between the lines: Woods' comments reflect what many oil analysts believe: Massive new industry investments are unlikely without far more clarity on security, long-term governance and fiscal terms, and more.
- Risk tolerance varies by company. Analysts see potential for relatively near-term boosts over the next one to two years, largely from improving existing projects and infrastructure, that would raise the country's output from its current approximately 800,000 barrels per day.
What we're watching: Returning Venezuela to output of around 3.5 million barrels per day last achieved in the late 1990s is another matter entirely — likely requiring a decade-long timeframe and perhaps north of $100 billion.
- For example, scholars with Columbia University's energy think tank estimate that expanding output by 500,000 to 1 million barrels per day would likely require over $10 billion over two to three years.
- Growing production to 2.5 million barrels daily would require an estimated $80 to $90 billion over six or seven years.
Go deeper: Trump declares national emergency to shield Venezuelan oil cash
Editor's note: This article has been updated with additional details throughout.
