Fault lines sprout on Venezuela's oil future after execs' meeting
Add Axios as your preferred source to
see more of our stories on Google.

Illustration: Aïda Amer/Axios
President Trump's huddle with oil executives and Energy Secretary Chris Wright's subsequent press blitz expose tensions running through the plans to boost Venezuelan output.
Why it matters: Controlling oil revenues and exports, and reviving its broken-down oilfields, are central White House goals after toppling Nicolás Maduro.
- But the uncertain environment for oil companies and the huge investments needed will create hurdles in the short and long term.
- So will Trump's zeal for low gas prices even as he pushes for new investments.
The big picture: Wright told Bloomberg TV on Friday that he expects growing production by this summer.
- "The key partners to watch are the ones that are already there — how do their operations change in the next few weeks and next few months," he said.
Reality check: There are doubts to spare about security, governance and far more clouding potential for even near-term increases.
- Longer term, returning Venezuela to its former output of over 3.5 million barrels per day in the late 1990s requires massive investments in the heavy oil Orinoco belt — and many years.
- "I'd say in the next eight to 12 years, we could get to 3 million barrels a day in Venezuela," Wright told reporters Friday outside the White House.
- Some estimates run north of $100 billion needed and well over a decade. And it's likely to require the balance sheets and expertise of the huge players.
At the same time, the amply supplied market and White House zeal for even lower energy prices sit uncomfortably next to its push for major new capital commitments.
- Wright, appearing on CBS's "Face the Nation," signaled the administration is fine with adding more oil to a well-supplied market — even though more barrels hits U.S. producers' profits.
Catch up quick: Friday's meeting with executives blended Big Oil hesitation on big new outlays with some independents showing interest.
- A top exec with Chevron — the sole U.S. player already there — expressed confidence about substantial increases over 18 to 24 months above its current output of 240,000 barrels per day.
State of play: Wright name-checked European players like Spain's Repsol in an interview on Fox Sunday Briefing and added: "I've got a crew of American wildcatters that said we'll go down this week and start checking things out."
What we're watching: Political timelines and oil prices — both in the short and longer term.
- A Wood Mackenzie note on investment conditions says that companies require "sustained" U.S. support.
- "[They] will need to be sure that support will last through future administrations and changes of control in Congress," Ed Crooks writes.
- And new heavy oil projects require vastly higher long-term prices than the Brent crude level of $50 to $60 per barrel that companies typically use to make decisions, they find.
The bottom line: "[F]irst movers would likely be in the less capital-intensive conventional production," RBC Capital Markets' Brian Leisen said in a note.
- Bloomberg oil analyst Javier Blas has a rather optimistic column that looks at "low-hanging barrels" — notably lighter grades in the east and some other fields.
