U.S. oil companies are reportedly demanding “serious guarantees” from the administration before investing in Venezuela amid President Donald Trump‘s call for a reshaping of global energy markets.
Legal, Political Risks Cloud Oil Talks
Despite Trump's suggestion that U.S. oil companies could be reimbursed for investing in Venezuela, executives remain wary, given the country's erratic policymaking, reported the Financial Times on Thursday.
The U.S. has also signaled it may ease some sanctions and permit American oilfield services firms to operate there. He has also summoned top energy executives to the White House on Friday, where they are expected to seek firm legal and financial safeguards before investing in Venezuela, according to the report.
U.S. efforts to revive Venezuela's oil industry under Trump have been met with skepticism from executives, who cite political and legal risks, Venezuela's degraded infrastructure, and low oil prices as major obstacles.
Despite Secretary of Energy Chris Wright and Trump having pressed major firms like Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP) to invest billions to rebuild production, the companies say they would need strong government guarantees and legal protections before committing to large investments, as per the publication.
Lawmakers Question Trump’s Venezuela Oil Plan
The U.S. government’s increasing involvement in Venezuela’s oil industry has raised concerns among industry players. Sen. Elizabeth Warren (D-Mass.) alleged that oil executives have more information about Trump’s “secret” Venezuela plan than the American public. This has sparked calls for public Senate hearings to shed light on the administration’s intentions.
Meanwhile, the US has declared its intention to maintain control over Venezuela’s oil sales “indefinitely.” Energy Secretary Chris Wright outlined a detailed plan to revive the sector, including overseeing the sale of Venezuela’s oil production and reinvesting the revenue in the country.
These developments have led to a debate about the potential return of Venezuelan oil to the global market. While many analysts anticipate an increase in Venezuelan supply, energy strategist Jeff Krimmel believes that the supply will be tightly controlled for political purposes.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
