Venezuelan Oil: Chevron, Shell and ExxonMobil Weigh the Risks of Costly Engagement

Major American oil companies are sending teams to Venezuela to assess investment opportunities, but their executives remain divided on the extent of commitment to make. The Trump administration, which captured former President Nicolas Maduro during a raid on January 3, is pushing Caracas to attract foreign capital into hydrocarbons and mining. The decline in Venezuelan production has already triggered regional ripple effects, notably in Cuba, which has suffered multiple total blackouts since the interruption of Venezuelan oil deliveries.

Executives With Divergent Positions

At the global CERAWeek (Cambridge Energy Research Associates Week) forum held in Houston, Mike Wirth, CEO of Chevron, stated he sees "signs of progress" in Venezuela. Chevron is the only international company to have maintained operations in the country in recent years. Wirth estimated that returning to production levels above three million barrels per day — recorded two decades ago — would require "a significant investment of several tens of billions of dollars." These prospects are set against a shifting global oil market, as illustrated by the tensions that recently prompted the International Energy Agency (IEA) to prepare to release its strategic reserves.

Shell CEO Wael Sawan described himself as "optimistic," while acknowledging that "there is still a long way to go." He indicated that Shell is in discussions for gas-related projects. Darren Woods, ExxonMobil's CEO, absent from the forum, stated that Venezuela is a country "where you can't invest." At the same time, Dan Ammann, another ExxonMobil executive, confirmed that a company team is currently in Venezuela conducting evaluations, estimating that a return to former production levels would require "probably hundreds of millions of dollars in investment."

Aging Infrastructure and Legal Uncertainty

Jorge Pinon, a researcher at the Energy Institute at the University of Texas at Austin, describes major companies as sending small teams to "scrutinize" the situation: infrastructure, logistics, and subsurface rights. He notes that Chinese and Russian operators still hold joint ventures in Venezuela. The country holds the world's largest oil reserves, but years of underinvestment, lack of maintenance, and US sanctions have severely constrained its production.

Under pressure from Washington, Venezuela's interim president Delcy Rodriguez pushed through a major reform of hydrocarbon laws in January, opening the sector to private and foreign investment. Doug Burgum, US Secretary of the Interior, told industry leaders gathered at CERAWeek that Venezuela "wants to be competitive in attracting your investments."

A Claimed Potential of Five Million Barrels Per Day

Maria Corina Machado, Venezuelan opposition leader and Nobel Peace Prize laureate, described the reform as an "unprecedented opening," calling the arrangement "a 100% privatization" in which the state would play a regulatory role. She stated that Venezuela's oil production capacity could reach up to five million barrels per day. According to her estimates, achieving that potential would require "more than $150 billion over the next 10 years."

Jorge Pinon tempers these projections, however: Venezuela's hydrocarbon law could be challenged by a future government on the grounds that it was not adopted by an Assembly "legitimately" elected by the people. This legal uncertainty stands as one of the main obstacles to mobilizing foreign capital in the sector, despite Washington's stated appetite for reopening the Venezuelan oil market.