US officials demand oil companies invest in Venezuela's industry to secure compensation for seized assets, as production struggles continue.
US officials have told oil executives they must invest heavily in Venezuela to revive its oil industry if they want compensation for assets seized two decades ago, reported Reuters.
In the 2000s, Venezuela expropriated the assets of foreign oil companies that refused to give state-run PDVSA greater control. Chevron stayed through joint ventures, while Exxon Mobil and ConocoPhillips left and pursued arbitration. Conoco has sought US$12 billion in compensation, while Exxon has pursued $1.65 billion.
US President Donald Trump stated that US firms are ready to spend billions to restart Venezuela's oil sector, just hours after President Nicolas Maduro was captured and flown to the United States. Officials informed executives that they must front investment costs before recovering debts.
ConocoPhillips said it is monitoring developments but declined to speculate on future business. Exxon did not respond to questions. Politico first reported the administration's outreach to oil majors.
Analysts warned that even if companies return, it could take years to boost output. Venezuela, an OPEC founding member, produced 3.5 million barrels per day in the 1970s but averaged only 1.1 million bpd last year. Production has collapsed due to mismanagement, sanctions, and lack of investment.
Firms face risks including unclear contract frameworks, poor infrastructure, security concerns, and political instability. Questions also remain over the legality of the US operation to capture Maduro.
