President Donald Trump's invitation to take advantage of Venezuela's upstream oil industry has failed to generate much enthusiasm among large US oil companies, treasury secretary Scott Bessent said Thursday.
"The big oil companies who move slowly, who have corporate boards are not interested," Bessent told the Economic Club of Minnesota. But, according to Bessent, "independent oil companies and individuals wildcatters... want to get to Venezuela yesterday."
Bessent's remarks constitute the first public confirmation that the US administration's hastily improvised plans to revive Venezuela's oil industry are hitting a snag. Energy secretary Chris Wright met with oil company executives in Miami, Florida, on Wednesday and Trump is expected to host a wide array of energy company executives at the White House on Friday.
A meaningful turnaround in Venezuela's upstream industry requires costly repairs to basic energy infrastructure covering everything from pipelines to power supplies, as well as access to the latest equipment and a skilled labor force that is ready to go.
Oil-focused investment plans touted by the Venezuelan opposition in the past five years estimated that at a minimum $100bn is required to boost output back to pre-US sanctions level of 1.2mn b/d. It would take much more if Venezuela wants to achieve its 27-year-old peak output of over 3mn b/d.
Persuading US companies to establish or, in the case of Chevron, to expand operations, will require security guarantees and a more stable business environment, which calls into question the timeline of transition outlined by the White House. The Trump administration at the moment plans to take over Venezuela's oil sales, help stabilize the country's oil industry and broader economy and only then address a possible transition through elections.
But Bessent explained the reluctance of large companies to invest in Venezuela in terms of "a lot of bureaucracy at multinationals". By contrast, smaller companies can go in quickly — "when you're writing your own check, you can do it, as opposed to if you have some of these boards".
Trump's pitch for investing in Venezuela — the need to keep retail gasoline prices in the US low — also contradicts the corporate direction of the publicly traded US producers, which in recent years prioritized profits over production growth even in US shale fields.
The sanctions waivers for buyers of Venezuelan oil include a clause requiring the bulk of the supply to be available for sale in the US, an example of the administration's effort to keep US oil and gasoline prices lower.
