America
US Urges Oil Majors: Invest Big In Venezuela To Recover Debts
US officials have made clear to Exxon Mobil, ConocoPhillips, and other large oil producers that recovering billions of dollars in expropriation claims would require substantial new investment in Venezuela after Nicolás Maduro. Under proposals now being discussed, companies would be expected to pay upfront to rebuild oilfields, pipelines and upgraders, with repayment coming later from higher production and export revenues. Analysts warn that the approach effectively turns old legal awards into new political and commercial exposure in a country marked by run-down infrastructure and weak governance. Even if companies agree, analysts say it would take years before Venezuela’s output increases enough to affect global oil prices.
The US government is pushing leading oil companies, such as ExxonMobil and ConocoPhillips, to invest heavily in Venezuela, making clear that fresh capital is a key requirement for recovering billions of dollars lost following past expropriations. According to industry executives, White House and State Department officials have told companies seeking compensation for assets seized under Hugo Chávez that they will need to finance repairs and restart drilling in the country’s deteriorating oilfields. The stance aligns with President Donald Trump’s promise that US companies would spend billions to revive Venezuelan oil output after Nicolás Maduro’s removal, even as it exposes the industry to significant political and financial risk.
Debt Recovery Tied To New Investment
According to people briefed on the talks, US officials have told oil companies seeking to recover arbitration awards or expropriation claims, that they would need to return to Venezuela as long-term investors rather than pursue compensation solely through the courts. ConocoPhillips has claimed around $12bn for seized projects, while Exxon Mobil has sought approximately $1.65bn through international tribunals, although much of that money remains unpaid. Under proposals now being discussed, companies would fund repairs to wells, pipelines and upgraders upfront, with repayment only beginning once production increases and exports generate revenue. In effect, the approach turns legacy claims into a wager on Venezuela’s future output, forcing company boards to balance uncertain returns against shareholder demands for tighter spending discipline.
Enormous Costs And Political Risks
Industry analysts say Venezuela would require at least $10bn over several years simply to halt the decline of an oil sector whose output has fallen from more than 3mn barrels a day to under 1mn after years of sanctions, mismanagement and under-investment. But even if Nicolás Maduro were captured and a new government installed, companies would still face uncertainty over contract law, the legitimacy of new authorities and the risk that future administrations revisit agreements negotiated with US backing. Infrastructure across the industry is in poor condition, with refineries and heavy-crude upgraders needing major rebuilding, unreliable power and port facilities, and weak security in remote fields. Executives also warn that shifts in US policy or international climate regulation could derail projects before debts are repaid, leaving companies exposed to stranded assets despite the country’s vast oil reserves.
Limited Near‑Term Boost For Oil Markets
Even if Chevron, ConocoPhillips and Exxon Mobil accepted Washington’s terms, analysts warn that Venezuela’s oil recovery would be slow, offering little near-term relief for global crude prices. Engineering assessments, contract negotiations and changes to sanctions regimes are likely to take months before drilling activity resumes at scale. Once work restarts, production from heavy-oil projects in the Orinoco Belt could take years to reach meaningful levels, particularly given the need to rebuild surface facilities after prolonged neglect. As a result, analysts expect only modest short-term price effects from Donald Trump’s Venezuela strategy, although a successful investment cycle could eventually add up to 2mn barrels a day to global supply, reshaping oil trade and challenging other heavy-crude exporters.
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