Houston: White House and State Department officials have told U.S. oil executives in recent weeks that they would need to return to Venezuela quickly and invest significant capital in the country to revive the damaged oil industry if they wanted compensation for assets expropriated by Venezuela two decades ago, according to two people familiar with the outreach. In the 2000s, Venezuela expropriated the assets of some international oil companies that declined to give state-run oil company PDVSA increased operational control, as demanded by late Venezuelan President Hugo Chavez.
U.S. oil major Chevron was among companies that negotiated to stay in the country and form joint ventures with state-run PDVSA, while rivals Exxon Mobil and ConocoPhillips left and filed for arbitration. President Donald Trump said on Saturday that American companies were prepared to return to Venezuela and spend to reactivate the struggling oil sector, just hours after President Nicolás Maduro was captured and removed by U.S. forces. In the recent U.S. administration discussions with oil executives in the scenario that Maduro was out of power, officials have said that U.S. oil companies would need to front the investment money themselves to rebuild Venezuela’s oil industry. That would be one of the preconditions for them eventually recovering debts from the expropriations.
That would be a costly investment for firms such as ConocoPhillips, the sources said. Conoco for years has tried to recover some $12 billion from the Chavez-era nationalization of its Venezuela assets. Exxon Mobil also filed international arbitration cases, trying to recover $1.65 billion. Trump began making public reference to the Venezuelan expropriations when he ordered a blockade of sanctioned oil tankers last month.
