Exxon CEO Says Political Reform Must Precede Major Venezuela Oil Investment

Darren Woods, ExxonMobil’s chief executive, told Washington policymakers that meaningful private investment to rebuild Venezuela’s petroleum infrastructure hinges on political stabilization and credible legal safeguards. His position came after a White House outreach pushing for up to $100 billion of private capital to help revive Venezuelan output, and it highlights a dispute over how quickly commercial actors should re-engage. Exxon’s caution is rooted in history: past nationalizations and unresolved claims leave a legacy of legal and political risk that cannot be neutralized by short-term assurances. That risk calculus is reinforced by market headwinds — a 2025 global crude surplus and higher OPEC+ output have depressed prices, reducing the near-term return profile for high-cost rehabilitation projects. Exxon reported quarterly results that beat estimates but showed year-over-year revenue and profit declines amid weak prices, even as the company recorded its strongest annual production in decades. Chevron’s distinct licensing arrangement with U.S. authorities and its public projection of a sizable near-term Venezuela production increase add competitive and political complexity for U.S. majors. Parallel to the administration’s outreach, Venezuela’s interim authorities have advanced draft hydrocarbons amendments intended to attract foreign capital: changes would allow mixed and private operators to play upstream roles, permit project-specific fiscal terms, introduce an Integrated Hydrocarbons Tax of up to 15% of gross income, and expand dispute-resolution mechanisms to shorten arbitration timelines. Washington has already marshalled limited leverage and liquidity — including a reported U.S.-managed crude sale that generated roughly $500 million under strict oversight — but that cash, routed through controlled accounts, does not substitute for a functioning dollar banking system or long-term credit in-country. Analysts note that restoring output, currently well below historical norms and under 1 million barrels per day, requires not only capital but rebuilt technical teams, secure contracts, upgraded pipelines and environmental remediation around aging fields such as Lake Maracaibo. U.S. planning draws lessons from the Iraq reconstruction experience and contemplates tighter oversight, intelligence vetting and sequencing of reforms — measures that could lower investor risk but also provoke nationalist pushback. For Exxon, the bottom line is governance and enforceability: absent credible, enforceable contract protections, predictable dispute-resolution and broader institutional reforms in Caracas, the company will not deploy the scale of capital the White House envisages. That posture makes a large-scale, Western-led reconstruction less likely in the near term and suggests any private capital that does flow will be incremental, conditional and tightly structured to limit exposure to political reversals.