President Donald Trump is meeting with executives from more than a dozen oil and gas companies on Friday, as he has called the industry to invest more than $100 billion in Venezuelan oil operations.
Trump, alongside Secretary of State Marco Rubio, Interior Secretary Doug Burgum, and Energy Secretary Chris Wright, was poised to meet with executives from U.S. oil majors Chevron, Exxon Mobil, and ConocoPhillips around midafternoon.
Other firms expected to be represented in the meeting include Continental, Halliburton, HKN, Valero, Marathon, Shell, Trafigura, Vitol Americas, Repsol, Eni, Aspect Holdings, Tallgrass, Raisa Energy, and Hilcorp, the Washington Examiner confirmed.
“Following the announcement of President Trump’s historic energy deal with Venezuela, American oil companies will come to the White House to discuss investment opportunities that will restore Venezuelan oil infrastructure,” a White House spokesperson told the Washington Examiner. “The American people, energy companies, and the Venezuelan people will all greatly benefit from these new, unprecedented investments in Venezuela’s oil infrastructure thanks to President Trump.”
Venezuela’s oil reserves played a significant role in Trump’s decision to capture former Venezuelan dictator Nicolas Maduro last weekend, with the president himself saying the removal of Maduro opens the opportunity for increased U.S. investment.
Venezuela is estimated to have the largest oil reserves in the world, around 300 billion barrels. The country extracts fewer than a million barrels of oil per day, however, less than one-tenth of the top producers in the world.
The Trump administration has said that the U.S. oil industry could quickly increase these production levels, potentially by 50% within the next 12 to 18 months.
“So you’re going to see, probably, a growth in Chevron activities there quickly. You’re going to see Conoco and Exxon and dozens of other American firms immediately looking at, ‘Hey, what constructive role can we play? How can we be a little bit of help for existing operations?’” Wright told Fox Business on Thursday. “They’re going to work to look at, ‘What’s going on in the industry and what productive advice and help can they give on that?’”
Major oil companies, though, have been publicly silent all week.
Ahead of the meeting, a lobbyist familiar with the discussions told the Washington Examiner that there was a clear disconnect between the administration’s desire to expand U.S. operations in Venezuela and Big Oil’s interest and ability to do so in the White House’s proposed timeline.
“There’s a lot of concerns, and there seems to be a disconnect in the expectations of both interest in returning to Venezuela and in the timing, in the practicalities that it would take in order to accomplish the objectives of increasing Venezuelan production,” the lobbyist said.
There is widespread agreement that, outside of lifting sanctions and the blockade, the administration can do very little over the span of a couple of days or even weeks to facilitate increased investments.
Most, if not all, the major firms still have lingering questions about return on investment, commercial agreements, political stability, financial backing, and even basic physical safety.
“They’re not going to commit people to a country that could be dangerous when they can’t guarantee safety,” Ed Crook, Wood Mackenzie’s Americas vice chairman and host of the Energy Gang podcast, told the Washington Examiner. “And they’re not going to be putting capital into a country where they think there’s a high risk their assets will be expropriated again, as they have been by previous governments repeatedly in the past in Venezuela.”
Trump teased some of these assurances earlier in the week, saying oil companies would be “reimbursed” for their investments.
However, Burgum threw cold water on financial backing from the government just hours before executives arrived at the White House on Friday.
“The capital is going to come from the capital markets and come from the energy companies,” Burgum told Bloomberg Television. “I don’t see that these companies are going to need support from the U.S., other than things around security. If we can provide a secure, stable environment, the resource here is so significant and so large that it’s going to be attractive for people to go in and develop.”
Industry sources estimate that it will take tens of billions of dollars to revitalize U.S. drilling operations in Venezuela, as only one company, Chevron, has been operating in the country for the last few decades.
Trump took those estimates further early Friday morning, claiming on social media that “BIG OIL” would be investing “at least 100 billion dollars” to rebuild Venezuela’s oil and gas infrastructure.
Trump’s efforts to increase U.S. drilling in Venezuela are tied to his own promise to lower oil prices and further drop prices at the pump, as domestic drillers have been unable to pursue new drilling under existing market conditions.
WHAT OIL COMPANIES NEED TO FULFILL TRUMP CALL TO REVITALIZE VENEZUELA’S INDUSTRY
Sources familiar with the matter told the Wall Street Journal that the president has told aides in the White House he believes U.S. domination over the Venezuela oil market can bring oil prices to around $50 a barrel.
Oil and gas executives have repeatedly warned that oil will need to sell around $70 and $75 per barrel to pursue new drilling opportunities.