Oil companies will spend $100 billion in Venezuela

President Donald Trump met with more than a dozen oil companies at the White House on Friday afternoon to discuss investment plans in Venezuela, less than a week after the The United States ousted President Nicolas Maduro.

Exxon Darren Woods, CEO ConocoPhillips CEO Ryan Lance, and Chevron Vice President Mark Nelson was in attendance. The leaders of Halliburton, Valero And Marathon were also present among others.

Trump said oil companies would spend at least $100 billion to rebuild Venezuela’s energy sector. The United States will provide security and protection so they “get their money back and get a very good return,” he said.

The United States will decide which oil companies enter Venezuela, the president said. The White House will “make a deal with the companies” on Friday or shortly thereafter, he said.

“One of the things the United States will get out of this situation will be even lower energy prices,” Trump said.

The White House called the meeting, an industry source told CNBC. It was not scheduled at the request of the oil companies, the source said.

Venezuela has the world’s largest proven crude oil reserves, 303 billion barrels, or about 17 percent of the world’s total, according to the U.S. Energy Information Administration.

But its oil sector is in very poor condition. Production has fallen from a peak of about 3.5 million barrels per day (bpd) in the 1990s to only about 800,000 bpd today, according to data from energy consultancy Kpler.

Rystad Energy estimates it will cost more than $180 billion by 2040 for Venezuelan production to reach 3 million bpd.

Working with Chevron

The Trump administration has provided few details on how it will encourage oil companies to make large investments in a country with a history of nationalizing industrial assets.

Chevron is the only U.S. oil company currently operating in Venezuela through a joint venture with the national oil company Petróleos de Venezuela (PDVSA). Energy Secretary Chris Wright told CNBC on Wednesday that the United States was working closely with Chevron.

“Chevron is on the ground, so we get daily updates,” Wright told CNBC. “They actually work [under] this diet. So with them, how can we make incremental adjustments or changes to allow their model to grow even further,” the Energy Secretary said.

Venezuelan production could increase by several hundred thousand barrels per day in the short to medium term with small capital deployments, Wright said.

Exxon and Conoco doubt

But Exxon and Conoco will need reassurance to return to Venezuela, Wright said. The companies left the country after former President Hugo Chavez seized their assets in 2007. They have billions of dollars in outstanding claims against the government that they won in arbitration cases.

“Our assets have been seized there twice, and so you can imagine that to go back there a third time would require some pretty significant changes from what we’ve seen historically,” said Exxon CEO Woods.

Wright said Venezuela’s debts to Exxon and Conoco must be repaid at some point, but are not an immediate priority for the Trump administration. The White House is focused on stabilizing Venezuela’s economy through oil sales, the energy secretary said.

“We are trying to engineer a transition from Venezuela to a place where Americans want to do business, invest new capital and develop new partnerships,” Wright said.

But it’s unclear whether the White House can convince companies like Exxon and Conoco to return to Venezuela without a radical change of government in Caracas.

“The big oil companies that move slowly, that have boards of directors, they’re not interested,” Treasury Secretary Scott Bessent told the Economic Club of Minnesota on Thursday.

“I can tell you that the independent oil companies and the individuals, the savages, our phones are ringing off the hook,” Bessent said. “They want to arrive in Venezuela yesterday.”

Leveraging Oil Sales

The United States took control of Venezuela’s oil exports to pressure the government in Caracas, Wright said. Venezuela will ship tens of millions of barrels to the United States, which the Trump administration will then sell, keeping the proceeds in U.S.-controlled accounts, the energy secretary said.

“We need to have that leverage and control over these oil sales to drive the changes that simply need to happen in Venezuela,” Wright said.

The Energy Secretary said the United States is not stealing Venezuela’s oil. Proceeds from sales will be used to benefit the nation of 30 million people, he said. Trump said Wednesday that oil revenues would be used to buy American-made goods.

“I have just been informed that Venezuela will ONLY purchase products made in the United States, with the money they will receive from our new oil deal,” the president wrote on social media on Wednesday.

The purchases will include agricultural products, medicines, medical devices and equipment intended to modernize Venezuela’s energy sector.

“In other words, Venezuela is committed to doing business with the United States of America as its primary partner,” Trump said.