More than half a year after the U.S. captured and extracted Nicolas Maduro from Venezuela, the biggest American oil firms haven’t returned to operating oilfields in the world’s largest oil reserves holder.
Chevron, which has operated in Venezuela throughout Maduro’s reign, is extracting and exporting oil to the U.S., but neither ExxonMobil nor ConocoPhillips have returned as negotiations led by Venezuela’s state oil firm PDVSA are not progressing as fast as the U.S. Administration probably thought in January when it extracted Maduro and hailed the big U.S. return to Venezuela’s oil industry.
There have been some deals signed in recent months, with service providers and smaller American oil companies, which seem more willing to take the risks of operating in the country, which has yet to see a stable political and fiscal environment for large-scale operations.
Earlier this month, Venezuela signed deals with oilfield service major SLB and Hunt Oil Co. as part of efforts to boost investment in its key energy industry, the country’s oil minister, Paula Henao, said.
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The agreement with SLB follows earlier reports about the oilfield services company sealing a long-term deal with the Venezuelan government to reverse a major decline in oil production and modernize the country’s oil industry.
Hunt Oil Company, for its part, said it was one of the first American companies to sign an agreement with PDVSA to help expand Venezuela’s oil and gas production.
“We’re proud to play a constructive role in revitalizing and growing the country’s oil and gas production,” said Hunter Hunt, CEO of Hunt Oil Company.
While smaller U.S. oil companies moved to sign deals with Venezuela’s PDVSA, Exxon and ConocoPhillips are taking their time.
Negotiations have reportedly hit a snag in recent weeks, the Wall Street Journal reported at the end of July, citing sources with knowledge of the talks. The setbacks in the negotiations include U.S. firms seeking the most lucrative fiscal terms for prized acreage in the Orinoco Belt, and PDVSA, with which talks are being held, not in a position to guarantee political and fiscal stability going forward, according to the Journal’s sources.
U.S. oil executives acknowledge the potentially huge prize of Venezuela’s oil, but they are not jumping into the unknown.
Another small and private U.S. oil company, California-based Pacific Coast Energy, also seeks a piece of Venezuela’s oil. Pacific Coast, backed by European investors, is finalizing an agreement with PDVSA and the Venezuelan government under the administration of Acting President Delcy Rodríguez that would enable the company to develop and operate oil fields in the country.
