The reason why oil and gas giants are hesitant to return to Venezuela

News source Reuters Recently, it was reported that Chevron is discussing with the US government about expanding its operating license in Venezuela, in the context of Washington and Caracas negotiating Venezuela’s delivery of 30-50 million barrels of oil to the US.

Previously, US President Donald Trump urged the country’s oil companies to invest in Venezuela’s energy industry. A White House spokesman declared: “All of our oil and gas companies are ready and willing to make major investments in Venezuela to rebuild oil and gas infrastructure.”

Chevron is the only major Western oil corporation to maintain a significant presence in Venezuela during decades of instability. According to analysts, this giant is one of the few US oil and gas companies with enough resources and qualifications to produce here. “Chevron has a superior position compared to US oil and gas companies,” said Francisco Monaldi, a Latin American energy policy expert at Rice University.

But besides Chevron, other oil and gas giants (Big Oil) are quite cautious about Mr. Trump’s call to return to investing in Venezuela for many reasons, from low oil prices to an unclear political future.

Oil prices have dropped 20% in 2025, the sharpest since 2020, currently trading around $60 per barrel. Meanwhile, for Big Oil to exploit and produce, it needs to spend tens of billions of dollars.

According to calculations by consulting company Rystad Energy, to maintain production at 1.1 million barrels per day, about 53 billion USD is needed to invest in Venezuela over 15 years. It wants to return to the golden age of the late 1990s with 3 million barrels per day, total capital expenditure for oil and gas up to 183 billion USD by 2040.

Thin profits and high investment make oil and gas industry CEOs and shareholders hesitant to take risks with risky projects. “The idea that the Venezuelan oil and gas industry will restart overnight is unrealistic. Everything is too early,” said Doug Leggate, CEO of Wolfe Research’s integrated oil and gas, refining, exploration & production segment.

It is likely that the US government will support investors with incentive policies such as financial guarantees, low-interest financing, refunds or other incentives. Mr. Trump has suggested some forms such as refunding costs to investors.

Dan Pickering, Founder and Investment Director of Pickering Energy Partners, said that the US government’s support and assurance mechanisms are very important. “That could speed up the process but it’s unclear whether they will be introduced,” he commented.

Another reason is that the actual political and security situation remains unstable. A source told CNN that “the president’s desires are different from the industry’s desires.” “The interest in jumping into Venezuela right now is quite low. We don’t know what the government will be like there,” the source commented.

Venezuela has the world’s largest oil reserves, with 303 billion barrels, equivalent to 17% of the global total, according to OPEC. However, when oil and gas companies decide to invest in drilling projects in remote areas, they need to feel secure about the operating environment for many years, even decades, to come.

“Just because there are oil reserves – even the world’s largest – doesn’t mean you’ll necessarily be able to produce there. It’s not like opening a mobile food store,” a source commented.

In addition, Big Oil companies that have operated in Venezuela are also wary because of past losses caused by nationalization policies. ExxonMobil and ConocoPhillips had their oil and gas assets nationalized between 2006 and 2007. To date, ConocoPhillips is still trying to recover about 12 billion USD from this case, while ExxonMobil is trying to get back nearly 2 billion USD, according to Reuters.

“Exxon will remember what happened to them there. At least a partial refund is needed but there isn’t enough money to pay right now,” said Ryan Kellogg, Vice Dean of the Harris School of Public Policy, University of Chicago. “Venezuela is the country that has seen the most nationalizations, meaning the initial risk premium there is very high,” notes Luisa Palacios, CEO of the Center for Global Energy Policy, Columbia University.

According to experts, today’s oil market is very different from when foreign companies sought to invest in Venezuela decades ago. Now America itself is the world’s largest oil producer. Neighbors such as Guyana and Argentina have also become important producers.

Meanwhile, Ms. Luisa Palacios said that Venezuela has a very unfavorable tax regime for foreign investors. Rather than risk it again, Big Oil has other options. Exxon is focusing on developing large oil fields in Guyana. “Venezuela is not the only option, not even in the entire Latin American region,” she said.