Exxon, Conoco’s Venezuela claims not immediate priority: Energy Secretary
Debts owed by Venezuela ConocoPhillips And ExxonMobil Those issues are not an immediate priority for the Trump administration after the ouster of President Nicolás Maduro, Energy Secretary Chris Wright told CNBC on Wednesday.
“The huge debts to Conoco and Exxon are very real and need to be recouped in the future,” Wright told CNBC’s Brian Sullivan. “But this is a long-term problem. This is not a short-term problem.”
Conoco and Exxon filed arbitration proceedings against Venezuela after former President Hugo Chavez nationalized its oil industry in 2007. Venezuela owes about $10 billion to Conoco and about $2 billion to Exxon, according to a JPMorgan note released Monday.
Wright said the Trump administration’s immediate priority is to stabilize Venezuela.
“What we need to do with the revenue from these oil sales is to stabilize the economy in Venezuela, stop the collapse of the bolivar, and prevent Venezuela from becoming a failed state,” the energy minister said.
Conoco and Exxon exited Venezuela after Chavez’s nationalization. Strip remained and became the only US oil giant operating in the country with a special license granted by the Trump administration.
Wright said it will take time for U.S. oil majors to invest the billions of dollars needed to rebuild Venezuela’s energy infrastructure.
“If you’re Exxon or Conoco and you’re out of the country, you just need normal, commercial business conditions, the rule of law and some security to come back. It’s going to take some time,” he said.
He said the Trump administration would work with Chevron on “incremental adjustments or changes” to ensure their production grows.
Wright previously told Goldman Sachs’ annual energy conference in Miami that Venezuelan production could increase by several hundred thousand barrels per day in the short to medium term.
The energy minister said the United States will control Venezuela’s oil sales indefinitely.
“We’re going to market crude oil coming out of Venezuela; first this backed up stored oil, and then we’re going to sell production coming out of Venezuela indefinitely,” Wright said at the Goldman conference.
“We need to have this power and control over oil sales to drive the changes that need to happen in Venezuela,” the energy minister said.
Trump will meet with oil executives at the White House on Friday, sources told CNBC’s Sullivan. The CEOs of ExxonMobil and ConocoPhillips, as well as a representative from Chevron, are expected to attend the meeting.
