Developing Venezuela’s Oil Industry following the Removal of its Leader, Nicolas Maduro, would require Major Legal and Commercial Changes, Exxon CEO Darren Woods has told Trump (R). Woods gave a Downbeat Assessment of the Viability of Restoring Oil Production in the South American Country believed to hold the World’s Largest Reserves, telling Trump that at the Moment, the Country’s Industry was “Uninvestable.”
Energy Industry Analyst, Thomas O’Donnell, said on Saturday, that One approach would be for Companies to work on Small Projects to Kickstart Production before Targeting the Oil Fields that require Heavy Investment. When contacted for Comment, the White House said in a Statement on Saturday, after the Arrest of Maduro, Trump “brokered a historic energy deal to further strengthen America’s national security in the Western Hemisphere.”
Venezuela is said to have the World’s Largest Oil Reserves, but the Infrastructure required to Tap these Resources is Dilapidated. After the U.S. Captured Maduro last week, Trump said U.S. Oil Producers were ready to spend $100 billion or More in Rebuilding the Infrastructure which could Deliver the Mutual Benefits of a Prosperous Future for the Latin American Country and a Profitable Enterprise for Energy Firms.
However, while Energy Chiefs have welcomed the Removal of Maduro, Woods’ Comments show the Lack ofFfirm Commitment from Oil Executives to Invest, as well as a degree of Nervousness regarding the Return on Investment, that could be seen after several years of Heavy Spending. During a Livestreamed Event in the White House with the Heads of: Exxon Mobil, Chevron, and ConocoPhillips, Exxon CEO Darren Woods, said Venezuela was Not a Good Investment, unless Legal and Commercial Changes were undertaken.
Woods said there had to be Durable Investment Protections, and there has to be a Change to the Ccountry’s Hydrocarbon Laws. He said that the Legal and Commercial Constructs and Frameworks made the Country’s Oil Sector “Uninvestable” unless there were “significant changes”, although He added He was Confident that the U.S. could make these Changes and Exxon would likely soon put a Technical Team on the ground in Venezuela, to Assess its Oil Infrastructure.
Harold Hamm, a Fracking Executive and Trump ally, told the Meeting that the Country has Challenges which the Industry knew how to Handle. Chevron is the Only Major U.S. Oil Company still Operating in Venezuela. Its Vice Chairman Mark Nelson, told the Gathering that it sees a Path towards Increasing its Production by 50% in the next Two years, from its current 240,000 Barrels a Day with its Partner, the Venezuelan State-Run Oil Company, Petróleos de Venezuela SA (PDVSA).
Jeffery Hildebrand, CEO of Independent Oil and Gas Producer Hilcorp Energy, said His Firm is “fully committed and ready to go to rebuild the infrastructure in Venezuela.” O’Donnell, who Produces the Website Globalbarrel.com, said that it’s Not just a matter of going into the Big Fields and making Big Investments, it could be a Gradual process.
Production could be Raised immediately by up to 40%, simply by Letting Foreign Companies back into the Country, with some Minor Equipment which would Encourage Firms to Work on Small Projects, Hhe said. Another Approach would be to Focus areas such as Around Lake Maracaibo, as there are Oil Fields that began to be Exploited in the 1970s but were Abandoned. Many of them were Not Depleted, as the Government in Caracas had Claimed, there was just a Lack of Capacity and Equipment.
"Those Mature fields could be Recovered rather easily by Smaller Companies, and as there are some Pipelines working in those areas, would need to be Improved to get that Oil to Ports", said O’Donnell. That would Raise a Significant Amount of Money and Allow Time to further Develop the Ssector ahead of the areas that require Long-Term Investment of billions of dollars, such as in the Faja del Orinoco, where the Extra Heavy Oil is.
Companies can go into those Regions now, but they would need to Upgrade the Oil to make it Lighter, so it can Flow through Pipelines. Heavy Oil can be Extracted and Mixed with Dilutants and Exported to U.S Refineries, which would be a way of getting Started while the Longer-Term Repairs to the High-Tech Equipment is undertaken, O’Donnell added. Even with the Caveats expressed by Oil Chiefs, the Potential for Developing Venezuela’s Reserves is likely to be a Priority for the Trump Administration.
Energy secretary Chris Wright (R) said the $100 billion figure cited by Trump was an Estimate for Reconstructing Venezuela’s Oil Sector, rather than a Firm Spending Commitment from Oil Firms.
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