ConocoPhillips (NYSE:COP) isn't eyeing new rigs in Venezuela — it's eyeing a repayment plan. While rivals quietly flirt with Caracas crude, Conoco's message to Wall Street was blunt: the company's priority isn't barrels, it's billions.
The playbook is simple — collect first, consider production later.
Cash Before Crude
On the fourth quarter earnings call, CEO Ryan Lance cut through the geopolitics with one line that matters more than any production forecast:
"Our focus remains on trying to get the recovery that has owed us from the two judgments that we have in place."
Translation for investors: Conoco's Venezuelan upside is legal, not operational. Years after its assets were expropriated, the company is pursuing cash through courts, settlements and asset sales — not preparing to pump again in a politically unstable market. Drilling talk can wait; dollar recovery cannot.
Citgo = The Real Prize
The storyline now revolves around Citgo, not Caracas oilfields. Lance signaled confidence that Washington wants the refiner in "U.S. hands," and that Conoco could ultimately collect part of its judgment through this process.
There's still an appeals process and licensing hurdles ahead, but the direction of travel is clear: asset monetization over risky re-entry.
Why Conoco Won't Rush Back
Even if sanctions ease, Lance stressed that a return would require durable policy, better security and workable relations with local authorities — none of which exist today. In other words, Venezuela remains a long-dated option, not a near-term catalyst. For now, patience is the strategy.
Why This Matters For Investors
Conoco isn't betting on Venezuelan production to lift earnings; it's betting on legal recovery to fortify its balance sheet.
If the Citgo process delivers, it could become a quiet, non-oil tailwind for cash returns — a rare upside that doesn't depend on crude prices.
Photo: Shutterstock
