Trump’s push to bring U.S. oil firms back to Venezuela faces long, costly recovery

President Trump has urged U.S. oil companies to return to Venezuela after the ouster of President Nicolás Maduro, but industry and political obstacles mean a revival of the country’s oil sector will not be quick or inexpensive. Analysts and former executives say a handful of Western producers could ramp up relatively quickly if political conditions were right, but a substantial recovery would likely take years and tens of billions of dollars.

Former Chevron executive Ali Moshiri said “not many companies are going to rush to go into an environment where there’s not stability.” He estimated Chevron and smaller operators could raise output to as much as 1.5 million barrels a day within 18 months at a cost of up to $7 billion, assuming current production near one million barrels a day.

Low oil prices — having fallen more than 20 percent in the past year — and the poor state of Venezuela’s infrastructure add to the challenge. U.S. sanctions remain a major constraint. The industry has been crippled by a campaign against many tankers used to export Venezuelan oil, including the seizure of a vessel called Skipper on Dec.

10, and only Chevron has been able to export regularly since then under a unique U.S. license, TankerTrackers.com reported. Other firms such as Italy’s Eni and Spain’s Repsol still produce offshore gas but have not been able to export since last year; Shell had a U.S. Treasury license to restart offshore work but negotiations were later cut off.

Key Topics

Business, Venezuelan Oil, Chevron, Us Sanctions, Nicolas Maduro, Exxon Mobil