ExxonMobil to send evaluation team to Venezuela
ExxonMobil Corp. is "a few weeks" away from sending a team to Venezuela as part of an evaluation on whether to return to oil and gas operations in the country.
Speaking at a Morgan Stanley conference Mar. 3, Jack Williams, senior vice-president, said the operator has put together an evaluation team and that it is “working logistical and security arrangements right now.”
With an existing US Treasury Department Office of Foreign Asset Control (OFAC) license, “we're probably going to have a team in country…to get boots on the ground,” he said.
Williams, who sits on the ExxonMobil executive committee and has, among others, the company’s supply-chain managers reporting to him, noted that ExxonMobil’s previous operations in Venezuela had been expropriated twice, adding “we know the asset…we had a very successful operation there. So no doubt, we can go in there and replicate that.”
Taking it a step further, Williams said given the operator’s work with heavy oil technology through its Canadian affiliate at Kearl and Cold Lake, there’s potential to enhance operations.
“I think we can do even better than we were before in terms of the technology toolkit that we can bring.”
The caveat: “Obviously, we would need to see some changes” in the regime and other arrangements “to make sure that we would have something we can take comfort in, in terms of being able to have a long-term operation without getting kicked out.”
Most recently, in 2007, Venezuela’s then-President Hugo Chavez nationalized the country’s oil operations, forcing major oil companies, including ExxonMobil, to cede majority control to state-owned PDVSA. ExxonMobil and ConocoPhillips were mired in litigation for years.
Now, sending a team to Venezuela is one part of a wider evaluation for a possible return. Williams said ExxonMobil will continue to work with the Venezuelan government on terms, and that “if we can get those terms in place…we will be interested in going back.”
'Uninvestable'
Williams’ assertion on terms echoes that of ExxonMobil’s chief executive following the removal of Venezuela’s leader Nicolas Maduro earlier this year, if with a slightly more optimistic tone.
At a meeting of oil executives Jan. 9 to discuss the possible involvement of the US in Venezuela—which holds large oil reserves yet to be produced—President Trump asked US oil companies to spend at least $100 billion to help advance the effort. Darren Woods, ExxonMobil’s chief executive officer, expressed trepidation.
“We have had our assets seized there twice…so, you can imagine to re-enter a third time would require some pretty significant changes from what we've historically seen and what is currently the state."
"Today it's uninvestable," he'd said.
About the Author
Mikaila Adams
Managing Editor, Content Strategist
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was later named Managing Editor - News. Her role has expanded into content strategy. She holds a degree from Texas Tech University.