Contrary to President Donald Trump‘s assurances, major oil companies are not keen on investing in Venezuela, according to Treasury Secretary Scott Bessent.
Majors Slow, Wildcatters Eager
Bessent, during Thursday’s speech at the Economic Club of Minnesota, stated that large oil companies with corporate boards are “not interested” in Venezuela. He explained that this is a “big strategic shift” for the corporate boards, hence they usually “move slowly.” Bessent also mentioned that he is constantly in touch with Mike Wirth, the CEO of Chevron Corp.(NYSE:CVX), on this matter.
The Treasury Secretary did, however, acknowledge that there is interest from other quarters. Bessent mentioned that the Department is being inundated with calls from “independent oil companies and…wildcatters” who are eager to invest in Venezuela.
Wildcatters are small, high-risk explorers that drill in untapped areas, potentially striking lucrative finds, but they lack the scale to substantially influence overall oil supply.
Oil Chiefs To Meet Trump
Bessent’s comments come ahead of the potential meeting of the leaders of three major U.S. oil companies with Trump in the White House on Friday. Meanwhile, Trump, on Thursday, told Sean Hannity of Fox News that the oil companies plan to invest close to $100 billion in Venezuela.
Notably, the U.S. has declared its intention to maintain a firm grip on Venezuela’s oil industry. Energy Secretary Chris Wright outlined a detailed plan to revive the sector, stating that the U.S. would continue to oversee the sale of Venezuela’s oil production “indefinitely.” However, the oil giants have demanded “serious guarantees” from the administration before investing in the Latin American nation.
Jim Mellon Bullish, Cramer Urges Caution
Billionaire investor Jim Mellon recently stated that while the Latin American country’s oil industry faces a long and difficult road to recovery, meaningful production gains are unlikely to materialize anytime soon. He also suggested that investors increase exposure to the oil sector.
At the same time, CNBC’s Jim Cramer has cautioned investors against chasing oil stocks amid the Venezuela turmoil, calling it “suboptimal strategy.”
Price Action: Despite the lack of interest from major oil companies, their stocks have rallied following the weekend capture of Venezuelan leader Nicolás Maduro by U.S. forces. Valero Energy Corp. (NYSE:VLO) surged 17.20%, while PBF Energy Inc.(NYSE:PBF) surged 17.64% over the past week, as per Benzinga Pro. Meanwhile, Chevron gained 4.67%.
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