Donald Trump Urges US Companies To Invest $100 Billion And Repair Venezuela's 'Rotting' Energy Industry

(MENAFN- Live Mint) U.S. President Donald Trump hosted top executives from major global oil companies at the White House on Friday to talk about Venezuela, saying he wants them to pour $100 billion into the country to massively boost output, Reuters reported.

After U.S. troops carried out a nighttime raid in Caracas on January 3 that resulted in the capture of Nicolás Maduro, Trump shifted his Venezuela strategy to focus primarily on oil, the report stated.

Here's what Trump said

"American companies will have the opportunity to rebuild Venezuela's rotting energy infrastructure and eventually increase oil production to levels never, ever seen before," Trump said at the opening of the meeting, Reuters reported.

He was flanked by top executives from Exxon Mobil, ConocoPhillips, Chevron Corp and others.

"We're going to be making the decision as to which oil companies are going to go in," the Republican president said. He praised an agreement with Venezuela's interim leaders to provide 50 million barrels of crude oil to the U.S., where numerous refineries are specially equipped to refine it. Trump said he expects such deliveries to continue indefinitely.

"One of the things the United States gets out of this will be even lower energy prices," he said.

US forces have kept intercepting Venezuelan oil tankers at sea to uphold the embargo, with a fifth seizure reported on Friday.

Trump administration officials have said they need to control Venezuela's oil sales and revenues indefinitely to ensure the country acts in America's interests, including by reducing corruption and drug trafficking, Reuters reported.

Some Democratic lawmakers have called this tactic a form of extortion, Reuters reported.

Industry experts have also cautioned that the country risks political instability as it tries to both condemn Maduro's capture and stay on good terms with the U.S.

“UNINVESTABLE”

Companies including Chevron, Vitol and Trafigura are competing for U.S. licenses to market Venezuela's existing crude oil, but oil majors are hesitant to commit to big, longer-term investments in Venezuela due to high costs and political instability.

Exxon CEO Darren Woods said at the White House meeting that the company sees Venezuela as currently "uninvestable" and needs to see significant changes to return there.

"We've had our assets seized there twice, and so you can imagine to re-enter a third time would require some pretty significant changes," he said, Reuters reported.

"We're confident that with this administration and President Trump, working hand in hand with the Venezuelan government, that those changes can be put in place," he said.

Exxon and ConocoPhillips departed Venezuela nearly 20 years ago after their assets were nationalized. Chevron Vice Chairman Mark Nelson said the company is committed to investments in Venezuela. Chevron is the only U.S. oil major still operating in the country.

Several smaller independents and private equity-backed players were also invited to the meeting, including some with links to Colorado, home state of Energy Secretary Chris Wright. Many of those executives praised Trump for his policies on Venezuela, and said they were prepared to invest in the country and market its oil, Reuters reported.

Decades of underinvestment have eroded production in Venezuela, an OPEC member that boasts the world's largest oil reserves but accounts for only about 1% of global supply.

In the 1970s, Venezuela was producing up to 3.5 million barrels of oil per day, which is over three times its current output.

During the meeting, Trump said the U.S. would protect the physical and financial interests of oil companies operating in Venezuela, but he offered no further details, according to the report.

On Friday morning, Energy Secretary Chris Wright said in an interview on Fox News ahead of the White House talks that there is "a real possibility" the U.S. could use its Export-Import Bank to help fund large oil projects in Venezuela. This could reduce financial risks for companies that decide to invest there.

(With inputs from Reuters)

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