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Exxon Signs Preliminary Deal to Return to Venezuela
Confirmed
In Short: ExxonMobil, the largest US oil company, has signed a preliminary deal with Venezuela that could mark its return to the country after nearly two decades of absence.
Exxon Signs Deal to Explore Return to Venezuela. NTD News
The agreement, signed on Monday, is non-binding and does not commit Exxon to any specific project, but it represents a significant step towards potential oil exploration and production in Venezuela.
Interim President Delcy Rodriguez welcomed Exxon back, expressing hope that the memorandum would soon lead to concrete agreements.
Exxon had previously held a 41.67% stake in the Cerro Negro heavy crude project and a 50% interest in the La Ceiba project in the southern Maracaibo basin before its assets were expropriated by the government of former President Hugo Chavez.
Exxon affiliates filed for arbitration against Venezuela at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in 2007, and in 2014, ICSID awarded Exxon $1.6 billion plus interest.
Exxon CEO Darren Woods said the company was prepared to send a technical team within weeks to assess the state of Venezuela's oil pipelines and more.
Woods noted that the legal and commercial frameworks in place today in Venezuela are currently uninvestable, and significant changes must be made to those frameworks and the legal system.
Exxon’s return to Venezuela would also be a significant move for the country, which has been facing economic challenges and a migrant crisis.
A final joint-venture or production-sharing contract would be needed before Exxon could take part in exploration or production.
The agreement is a meaningful first step, but any future investment would require stable policies, clear regulations, strong investment protections, and competitive returns, according to the company’s statement.
Interim President Rodriguez said Exxon would invest under favorable conditions and within a framework of legal certainty to protect its operations.
Exxon’s potential return to Venezuela could bring benefits both to the company and to the Venezuelan people, according to Rodriguez.
What this adds
The deal is non-binding and does not commit Exxon to any specific project, leaving room for further negotiations.
Exxon’s return to Venezuela is contingent on significant changes to the country’s legal and commercial frameworks.
What's confirmed
- If the top US oil producer moves toward development, it would represent a remarkable return for Exxon to Venezuela after exiting nearly two decades ago when its previous assets were expropriated by the government of former President Hugo Chavez.
What's still developing
- Exxon did not disclose which projects or oil areas it was evaluating.
- The last two presidential elections, with 2024 counting more than 2020.
- "We've had our assets there seized twice."
- Chevron is the only major U.S. oil company still operating in Venezuela under a special license granted by the U.S. government, given the sanctions imposed.
- Trump views enlisting the support of oil companies as the central element in his effort to rebuild Venezuela's ailing economy.
- The expropriations of numerous companies, housing constructions, and over 3.6 million hectares’ worth of land were among the cornerstone objectives in Chávez’s plans to implement so-called “Bolivarian socialism” in Venezuela in the years prior to the collapse of socialism during the 2010s, which led to what is now known as the worst migrant crisis in the Western Hemisphere.