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Exxon Evaluating 7 Venezuelan Areas for Energy Projects
Confirmed
In Short: Exxon is assessing seven areas in Venezuela for potential energy projects, marking a return to the country after nearly two decades.
ExxonMobil and Venezuela sign strategic agreements to resume joint operations in the country. TeleSUR English
Exxon is exploring seven areas in Venezuela for possible energy projects, signaling a significant return to the country after exiting nearly two decades ago due to asset expropriation by the government of former President Hugo Chavez.
The company did not disclose which projects or oil areas it was evaluating, but sources say a final contract for a joint venture or production-sharing agreement would be necessary to confirm Exxon’s participation in oil exploration or production.
Interim President Delcy Rodriguez welcomed Exxon back, expressing hope that the memorandum of understanding would soon lead to concrete agreements.
Before its assets were expropriated, Exxon 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.
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.
Rodriguez emphasized that Exxon would invest under favorable conditions and within a framework of legal certainty to protect its operations.
Exxon CEO Darren Woods had previously stated that progress had been made on fiscal and legal terms but cautioned that the company was not in a rush.
The agreement is non-binding and does not commit Exxon to any specific project, but it marks a significant step towards potential future investments.
What this adds
The earthquakes in Venezuela add a layer of complexity to Exxon's potential return, as the company will need to consider the safety and stability of the regions it is evaluating for investment.
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.
- Exxon did not disclose which projects or oil areas it was evaluating.
What's still developing
- “We welcome you back,” Rodriguez said, adding that Venezuela expected the partnership to bring benefits both to Exxon and to the Venezuelan people.
- REUTERS/Dado Ruvic/Illustration By Sheila Dang, Marianna Parraga and Deisy Buitrago The sources provided details about a memorandum of understanding that Exxon and PDVSA signed on Monday in Caracas in the presence of interim Venezuelan President Delcy Rodriguez.
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- "This was not some paperwork violation, or a simple mistake," he said.