US oil firms juggle Venezuela opportunity, investor concern ahead of White House summit

(Repeats previously published story without changes to title or text)

Investors are skeptical about Venezuela’s political stability and investment costs

Sources say Chevron and ConocoPhillips are cautious about investing in Venezuela

Rubio says US plans three-phase process for Venezuela’s recovery

Written by: Sheila Dang and Jarrett Renshaw

Jan 9 (Reuters) – U.S. oil executives summoned to the White House on Friday to discuss potential investment plans in Venezuela will carefully consider the country’s business potential and President Donald Trump’s enthusiasm, along with the more cautious view expressed by some investors. Speaking at a Goldman Sachs energy conference in Miami this week, Energy Secretary Chris Wright repeated Trump’s claim that US oil companies are ready to spend billions of dollars to rebuild the South American country’s oil economy after US forces removed Nicolás Maduro from power on Saturday.

But some energy investors were skeptical and questioned the cost of such spending in Venezuela, which has the world’s largest crude oil reserves. They also had ongoing concerns about the country’s political stability and whether they could trust the interim government led by Delcy Rodríguez in Caracas.

“Investors will want to see long-term stability and good financial conditions to hedge against the risk of asset expropriation, which we have seen in Venezuela in the past,” said David Byrns, portfolio manager and senior investment analyst at American Century Investments, a major shareholder of Chevron and Exxon Mobil.

Multiple attendees at private meetings held by Chevron and ConocoPhillips at the Miami conference told Reuters that executives at those companies offered little insight into Venezuela but made one thing clear: they did not intend to make hasty decisions.

Chevron and Conoco did not immediately respond to requests for comment. On Friday, Trump is expected to encourage oil executives to invest and increase Venezuela’s crude production during a meeting attended by Wright, Secretary of State Marco Rubio, Interior Secretary Doug Burgum and 17 major companies. Companies represented will include ConocoPhillips, Exxon, Chevron, as well as Spanish Repsol and trading firms Vitol and Trafigura, according to sources familiar with the matter.

Chevron already operates in the country, but Exxon and Conoco left nearly 20 years ago after their assets were nationalized and they are still left billions of dollars in debt. “The tension is between the compelling geological resource and obvious business opportunity and the significant surface risk, uncertainty and outstanding claims,” said Geoffrey Pyatt, former Assistant Secretary of State for Energy Resources in the Biden administration. Foreign embassies in Venezuela have started organizing visits next week that will include representatives of American and European oil companies, two sources told Reuters on Thursday. Matthew Sallee, chief investment officer at fund manager Tortoise Capital, which owns a stake in Chevron, said he could support more Venezuelan investment if Chevron shows returns, but he would be very careful because the infrastructure in the country is so dilapidated.

“If Chevron says we’re going to allocate billions of dollars a year to Venezuela, we’ll probably sell,” he said.

Service companies, which could be among the first beneficiaries of any incursion into Venezuela as infrastructure is rebuilt, tried to stem the sudden excitement. “We have a shipyard in Colombia, across the border, that can deliver equipment to the region, and we understand what it takes to work there, but we have to make sure the timing is right and we have the right customer-partner relationship,” Helmerich & Payne President Trey Adams said at the Miami conference.

QUESTIONS ABOUT POLITICAL INSTABILITY STILL EMERGE Ali Moshiri, former head of Africa and Latin America for Chevron and now CEO of Amos Global Energy, said his firm is planning to enter Venezuela and is in early-stage talks with U.S. government agencies for public financing and with utility companies to repair infrastructure and build pipelines. However, he added that despite the intense interest of investors, the plan will depend on the US determining who will manage the transition process in the country.

“This decision needs to be made, this is the prerequisite for investors,” Moshiri said. While Trump has said the United States intends to control Venezuela, it remains unclear how that will play out on the ground, especially given questions about how the different spheres of power in Caracas will get along in Maduro’s absence. Rubio said Wednesday that the United States has a three-phase plan for Venezuela that will begin with stability, then a recovery phase that gives U.S. oil companies access to the country, and finally a transition. Samantha Carl-Yoder, co-head of international lobbying for Brownstein Hyatt Farber Schreck, said some U.S. oil companies may be concerned they may be pressured to enter Venezuela quickly or face negative consequences down the line. “Companies may feel they need to pivot to get what they want in other areas. Will management hold permits and licenses hostage? Will management provide some financial incentives to companies entering? These are questions I would be asking if I were an integrated oil company,” he said.

(Reporting by Sheila Dang, Nathan Crooks and David French in Miami, Jarrett Renshaw in Washington and Shariq Khan in New York; Additional reporting by Stephanie Kelly and Pietro Lombardi; Editing by Nathan Crooks and Nia Williams)