President Donald Trump is projecting confidence that the capture of former Venezuelan dictator Nicolas Maduro will pave the way for U.S. oil and gas companies to invest billions into expanding operations in the country.
The industry, however, has been relatively silent on the possibility of spending capital in Venezuela, as many questions remain regarding the future of the nation’s government, U.S. control of oil assets, and the ability to transfer the thick crude.
Executives from oilfield service providers Baker Hughes, Weatherford, and Halliburton; producers Chevron and Exxon; and energy technology firm Schlumberger are expected to meet with administration officials at the White House on Friday.
During that meeting, a lobbyist familiar with the discussions told the Washington Examiner that the firms will air their concerns about their ability and willingness to invest in Venezuela’s oil industry.
“There’s a lot of concerns and there seems to be a disconnect in the expectations of both interest in returning to Venezuela and in the timing, in the practicalities that it would take in order to accomplish the objectives of increasing Venezuelan production,” the lobbyist said Wednesday.
There is widespread agreement that many of the questions surrounding business in Venezuela will take time to address, such as who will govern the country, what the long-term security situation will be, and with whom the oil and gas companies will be contracting.
In the short term, however, industry experts have outlined several actions the administration can take to alleviate concerns and signal to the oil industry that there will be a suitable environment for long-term development.
Sanctions relief
Numerous energy analysts and industry sources have pointed to lifting sanctions on Venezuelan crude as the first step in instilling confidence in U.S. oil and gas firms.
“They’re gonna need continued support from the U.S. government and an expectation that there will be continued support through future changes in administration because investing in Venezuela is gonna be a long-term business,” Ed Crook, Wood Mackenzie’s Vice Chair Americas and host of the Energy Gang podcast, told the Washington Examiner.
“And so probably a lot of the consequences go out beyond President Trump’s term and then you’re gonna want some confidence of the U.S. government is gonna remain supportive, for instance: lift sanctions,” Crook said.
Trump first imposed sweeping sanctions on Venezuela and its energy sector during his first term, in an effort to pressure Maduro to step down.
These were later softened by the Biden administration in 2023 in an attempt to offer relief for high prices amid Russia’s invasion of Ukraine.
That decision was reversed just months later, as the Biden administration claimed Maduro’s government failed to live up to its commitments to hold free and fair elections.
On Wednesday, the Trump administration indicated that it was moving forward to selectively roll back some sanctions as it looks to collect and sell approximately 30-50 million barrels of sanctioned Venezuelan oil.
Trump’s blockade
In December, Trump ramped up pressure on Maduro’s government by enforcing a blockade of sanctioned oil.
Mariam Al-Shamma, a director with the Bipartisan Policy Center’s Energy Program, told the Washington Examiner that lifting the blockade is one of the few things that is in the administration’s hands in terms of directly easing industry concerns in the short term.
“I would think the physical blockade, similar to sanctions, would be something that could be changed fairly rapidly,” she said.
The administration has indicated that it intends to continue to use the blockade to force the Maduro regime, without the captured dictator, to negotiate.
Secretary of War Pete Hegseth said on Wednesday that the blockade would not be going anywhere to target “dark fleet vessels” illegally carrying Venezuelan oil.
“Only legitimate and lawful energy commerce—as determined by the U.S.—will be permitted,” he said.
Long-term solutions
Several industry experts have stated that the administration has very little it can do over the span of a couple of days or even weeks to facilitate increased investment from U.S. companies in Venezuelan oil patches.
There are, though, many obstacles to be addressed in the coming months.
This includes providing assurances regarding return on investment, commercial agreements, political stability, financial backing, and even basic physical safety.
“They’re gonna have to be sure about security and safety,” Crook said of oil majors like Exxon Mobil and ConocoPhillips.
“They’re not gonna commit people to a country that could be dangerous when they can’t guarantee safety,” he added. “And they’re not gonna be putting capital into a country where they think there’s a high risk their assets will be expropriated again, as they have been by previous governments repeatedly in the past in Venezuela.”
Regarding financial security, Al-Shamma pointed out that the administration may be able to use tools like the U.S. Export-Import Bank to facilitate additional loans for oil and gas projects, which it already does for companies engaged in business in nations like Mozambique and Bahrain.
“I think that would probably take longer, because you have to kind of wait for the shape of the project to become clearer before the bank would step in to finance,” she said.
No swift outcome
While stock markets have been moving in favor of the oil majors, oilfield service companies are heading to the White House. However, industry analysts have warned that very few decisions can be made this week.
“Because, for all intents and purposes, the people that were there last week are still there this week, in terms of the government structure,” Dan Pickering, Chief Investment Officer at Pickering Energy Partners, told the Washington Examiner.
As a result, Pickering said, most United States or Western companies thinking of expanding in Venezuela have to rely on the Trump administration’s next proposals and moves before making any business decisions.
“If you’re going to spend five or 10 years and billions of dollars, it can’t be something that the next person unwinds, the next president or the next administration unwinds,” he continued. “So all paths right now probably lead through some sort of conversation with the U.S. government.”
OIL INDUSTRY WINNERS FROM MADURO CAPTURE
A lobbyist familiar with discussions taking place with the White House this week told the Washington Examiner that they doubt industry executives expect to have their fundamental questions about security, stability, and legalities answered anytime soon.
“Where I’m seeing a disconnect, is a disconnect in the expectations from the administration that the level and the enthusiasm to reenter Venezuela has been pent up and is in existence. It’s not, because of these serious unanswered questions,” the lobbyist said.
