Last week, I attended AAPG’s Subsurface Energy to Power conference and helped facilitate its Energy Finance and Business session. I learned so much about geothermal, lithium, data centers, and their energy needs from colleagues in the industry, academia, investments, tech companies, and government. The most rewarding experience for me was speaking to the enthusiastic students at the event.
Now, let’s jump into two pieces of energy news for the week.
Shangyou Nie
Editor, Well Read
Trump Speaks to Industry Executives, Seeking Investors for Venezuela
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Last Friday, President Trump invited rouhgly two dozen U.S. and European oil industry executives to the White House to discuss the future of Venezuela’s oil industry. The industry leaders showed strong interest in ways to shape the future of Venezuela’s oil industry.
What did President Trump say?
President Trump said that oil companies will have an opportunity to spend “at least 100 billion dollars” to increase Venezuelan production to a level that the world has never seen before.
“If we make a deal, you will be there a long time. If we don’t make a deal, you will not be there at all,” said Trump.
What did the executives say?
Four industry representatives were invited to speak before a Q&A with the press:
Mark Nelson, Vice Chairman of Chevron
Darren Woods, CEO of ExxonMobil
Ryan Lance, Chairman and CEO of ConocoPhillips
Harold Hamm, Chairman of Continental Resources
Chevron: Chevron committed to doubling its production in Venezuela within 18–24 months.
Nelson assured the group that Chevron can increase its production by 50 percent in the “next 18-24 months,” meaning Chevron’s operated production can grow from 240,000 barrels per day to 360,000 barrels per day before the end of 2027.
ExxonMobil: Woods said Venezuela is currently “uninvestable.”
Woods emphasized ExxonMobil’s long-term investment philosophy is based on win-win-wins for shareholders, the resource-holding government, and the resource-holding people.
Woods said that ExxonMobil was in Venezuela as early as 1940s, but had its assets seized twice. For ExxonMobil to re-enter Venezuela, there would need to be significant changes to the country’s legal and economic systems, including its hydrocarbon laws.
Woods highlighted that ExxonMobil has the integrated capabilities in production, refining, and trading to help get Venezuelan oil to the international market.
Woods said that ExxonMobil could send a technical team to assess the current status of the industry in the next couple of weeks, with the “invitation of the Venezuelan government” and the “appropriate security guarantees.”
Lance liked Trump’s “big and bold idea” to use energy commerce, instead of conflict, to help make changes for Venezuela. He encouraged Trump’s team to keep thinking big and “and even bolder,” by reforming Venezuela’s energy system, including its state company PDVSA.
Lance said COP had previously written off $12 billion in assets seized by the Venezuelan government. He added that banks need to be involved in the discussions around how debt should be re-structured to deliver billions of dollars in investment in Venezuela.
Continental Resources:
Hamm thinks that the opportunity in Venezuela is a “jewel” in the industry that can be better developed.
He, however, did not commit to going into Venezuela when Trump asked.
“I didn’t like Exxon’s response,” said President Trump. “They are playing too cute.”
Which industry leaders attended the White House meeting?
American attendees at the meeting included Chevron, ExxonMobil, ConocoPhillips, Continental Resources, Armstrong Energy Corp., Aspect Energy, Hilcorp, Halliburton, Marathon Petroleum Corp., and Valero.
European attendees at the meeting include Shell, ENI, Repsol, SLB, Trafigura, and Vitol. BP and TotalEnergies were not present.
What’s next:
Trump will meet with Venezuelan opposition leader María Corina Machado on Thursday in Washington D.C.
Trump’s Energy team will have another meeting with the energy executives, though likely a different group than previously invited.
What to watch: There will likely be four types of companies involved in the emerging Venezuelan growth opportunity:
The oil companies already in Venezuela, including Chevron, Repsol, ENI, and service companies like SLB. These will increase the scale of their operations and capacity almost immediately.
Gulf coast refiners and U.S. and European oil service companies not yet in Venezuela. This group can work on improving the infrastructure and facilities and can purchase Venezuelan crude with approval from the Trump administration and the Venezuelan interim government. Approval would be achieved either through sanctions being lifted or on a case-by-case basis.
Niche smaller upstream players that want to move faster to capture the acreage. This is the group willing to take the risk before the new legal and fiscal system are established.
Major IOCs not yet in Venezuela. For this group to re-enter Venezuela, the companies need security and financial guarantees so they are confident that their big investments will not be seized again and will withstand long-term political and economic changes.
Go deeper: For the full video of the White House meeting, refer here.
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Chris Wright Interviews With Bloomberg After the Meeting
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During an interview with Bloomberg after the 9 January White House meeting, Chris Wright, U.S. Secretary of Energy, clarified a few points relating to Venezuela:
The $100 billion investment Trump mentioned is for the next decade.
Trump’s energy team wants to put incentives in place to help revive the oil industry in Venezuela.
“The incentives are very aligned” with the current Venezuelan leadership to sell more oil and at higher prices, Wright noted.
“In the short term, the goal is to flow funds to the interim authorities in Venezuela, stop the collapse of the local currency, and get the economy to stabilize,” Wright said.
“The key [companies] to watch are the ones already on the ground,” Wright said, referring to companies including Chevron, Repsol, ENI, and SLB, among others.
“I have no doubt at all that we will see massive increases in investment from many companies into the oil and gas industry in Venezuela,” Wright said.
“We will see production profile increase later this year, hopefully by this summer,” he predicted.
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