Former Operators Return with Venezuela Supplying Oil to US Indefinitely

ExxonMobil and ConocoPhillips executives’ scheduled White House meeting marks potential return to operations supporting Venezuela supplying oil to the US indefinitely more than a decade after Hugo Chávez nationalized their assets. The companies lost billions when Venezuela seized facilities in the mid-2000s, creating lasting corporate wariness about new investments.
ConocoPhillips ultimately secured a $2 billion arbitration award for nationalized assets but collected only partially through asset seizures in third countries. The incomplete compensation demonstrates difficulties enforcing international judgments against sovereign nations, providing cautionary lessons informing current investment considerations regarding Venezuela supplying oil to the US indefinitely.
ExxonMobil similarly pursued arbitration claims for seized Venezuelan operations, though settlements fell short of claimed losses. Corporate leadership must balance potential profit opportunities from Venezuela supplying oil to the US indefinitely against institutional memories of previous expropriation and incomplete compensation, requiring careful risk assessment.
Trump’s characterization of the nationalizations as historic American losses suggests administration sympathy for companies’ previous setbacks. Potential compensation through preferential access to revitalized Venezuelan operations supporting Venezuela supplying oil to the US indefinitely could incentivize new investments despite past negative experiences.
However, major publicly-traded companies face fiduciary duties requiring prudent capital allocation. Boards and shareholders will demand comprehensive risk mitigation beyond presidential assurances before committing billions to politically unstable regions with proven expropriation histories, even for Venezuela supplying oil to the US indefinitely, regardless of current arrangements appearing favorable.