American Oil Giants Collectively Refuse to Invest in Venezuela: Why Has the "Energy Goldmine" Turned into a "Hot Potato"?

Year, Month, Day, a closed-door meeting in the West Wing of the White House in Washington drew global attention to the energy market. U.S. President Donald Trump gathered top American energy giants such as ExxonMobil, Chevron, and ConocoPhillips, proposing an initiative to "comprehensively manage Venezuela and reshape the global energy landscape" in an attempt to encourage these giants to invest in Venezuela's oil industry. However, faced with this seemingly tempting "energy opportunity," most of the giants remained collectively silent, with ExxonMobil explicitly stating that "Venezuela is currently not investable at all." The deadlock in this meeting not only exposed the practical challenges of the Trump administration's energy strategy but also revealed the multiple risk traps behind Venezuela's oil resources.

1. Core of the Event: Trump's Strategic Initiative and the Collective Cold Shoulder from Giants

(I) Core Elements and Atmosphere of the Meeting

The participants of this closed-door meeting included "leaders" from the American energy industry, such as ExxonMobil (), Chevron (), and ConocoPhillips (), all of which hold significant influence in the global energy market. Trump had previously signaled through the media, promising that the United States would "fully manage" Venezuela to pave the way for these giants to invest, attempting to reshape the global energy landscape by leveraging Venezuela's oil resources. However, surprisingly, in the face of this "grand gift," the atmosphere at the scene was notably cold. The giants generally remained silent and did not respond as enthusiastically as Trump had anticipated.

(II) Trump's Deep Strategic Intentions

Behind Trump's push for investment in Venezuela lie three strategic considerations: first, controlling international oil prices by renovating Venezuela's oil facilities and rapidly increasing production to drive global oil prices down from over $50 to below $50; second, undermining Russia's finances by leveraging Russia's heavy reliance on oil revenues, depressing oil prices to weaken the ruble and destabilize its domestic stability; third, competing for global energy dominance, attempting to break the current pattern where oil prices are jointly influenced by oil-producing countries like Russia and OPEC+, and regain control over energy pricing power. To pressure major corporations, Trump even claimed, "If they are unwilling to invest, there will be 25 companies ready to take their place," and after the meeting, he stated, "An agreement has essentially been reached, with giants investing hundreds of billions of dollars." However, this statement has not been acknowledged by the companies involved.

II. The Roots of Rejection: Multiple Factors Behind Venezuela's Oil Transition from "Prime Asset" to "Hot Potato"

For U.S. oil giants seeking stable returns, Venezuela's oil resources, despite their vast reserves, conceal multiple fatal flaws that significantly diminish their investment value, ultimately turning them into a "hot potato."

(1) Innate Disadvantages: Poor Oil Quality and Extremely High Investment Thresholds

Although Venezuela possesses the world's largest proven crude oil reserves (the Orinoco Oil Belt), even surpassing Saudi Arabia, the shortcomings of its resource endowment are extremely prominent. First, the crude oil quality is extremely poor: the vast majority of the crude is not easily extractable light oil, but extra-heavy oil similar to "asphalt," which is completely immobile at room temperature and must be mixed with a "diluent" to be transported via pipelines. Second, the investment threshold is extremely high: extracting this extra-heavy oil requires highly complex extraction, dilution, and upgrading technologies, making it a typical technology-intensive investment, not a simple "insert a pipe and get oil" project. Third, the investment cycle is excessively long: projects require extremely long payback periods and must be supported by a stable political environment, which completely contradicts the current trend in the oil industry favoring short-cycle investments.

(II) Acquired Difficulties: Adverse Business and Political Environment

If inherent disadvantages are the "roadblock," then Venezuela's unfavorable business and political environment is the "fatal blow," which also constitutes the core concern for major corporations.

1. Unsecured Assets, Historical Trauma Etched in Memory: During the Hugo Chávez era, billions of dollars worth of assets belonging to ExxonMobil and ConocoPhillips were "nationalized" by the government overnight without any compensation. This "predatory nationalization" left a deep, unhealed scar on the energy industry, making major corporations highly vigilant about asset security. Today, with the Venezuelan government and its state-owned oil company PDVSA burdened by hundreds of billions of dollars in defaulted debt, any American company entering the country could face intricate legal disputes. Once extracted crude oil is transported to international waters, it might even be seized by creditors through court orders.
2. Complete Infrastructure Collapse, Astonishing Reconstruction Costs: Venezuela once possessed the most modern refineries and ports in Latin America, but today they have become "ruins": oil pipelines are riddled with holes due to lack of maintenance, crude oil leaks are everywhere; refinery tower cranes are rusted solid, core components dismantled and sold as "scrap metal." If companies enter, their primary task is not oil extraction, but undertaking a massive "ruins reconstruction project." Estimates suggest that merely restoring Venezuela's daily export capacity of 2 million barrels would require over $180 billion and many years, with most facilities needing complete replacement rather than repair.
3. Lack of Operational Support, Production Difficult to Sustain: Oil extraction and heavy oil upgrading require substantial electricity, water resources, and steam, but large-scale power outages have become "commonplace" in Venezuela. For a project worth tens of billions of dollars, unstable power supply could lead to frequent damage to core, expensive equipment. This financial risk is unbearable for any enterprise.
4. Complex Geopolitics, Questionable Policy Continuity: Major corporations are generally concerned about whether the "management" of Venezuela by the United States will be carried out by the military or an interim government, and whether enterprises can safeguard their autonomous operational rights amidst administrative directives and geopolitical games. They are even more worried that if the next U.S. administration changes its policy, the tens of billions of dollars already invested could be completely lost.Complex Geopolitics, Questionable Policy Continuity: Major corporations are generally concerned about whether the "management" of Venezuela by the United States will be carried out by the military or an interim government, and whether enterprises can safeguard their autonomous operational rights amidst administrative directives and geopolitical games. They are even more worried that if the next U.S. administration changes its policy, the tens of billions of dollars already invested could be completely lost.
5. Severe Brain Drain, Sharp Increase in Operating Costs: Over the past 20 years, Venezuela has experienced an unprecedented brain drain. The political purges under the Chavez government led to the dismissal of tens of thousands of professional engineers from PDVSA. These talents are now scattered in places like Texas, Colombia, and the UAE. Currently, Venezuela's oil industry is largely staffed by political officials who are "loyal but lack technical skills." If major corporations were to enter the market, they would not only need to transport machinery and equipment but also have to staff positions "from cleaners to chief engineers" entirely, which would significantly increase operating costs.Severe Brain Drain, Sharp Increase in Operating Costs: Over the past 20 years, Venezuela has experienced an unprecedented brain drain. The political purges under the Chavez government led to the dismissal of tens of thousands of professional engineers from PDVSA. These talents are now scattered in places like Texas, Colombia, and the UAE. Currently, Venezuela's oil industry is largely staffed by political officials who are "loyal but lack technical skills." If major corporations were to enter the market, they would not only need to transport machinery and equipment but also have to staff positions "from cleaners to chief engineers" entirely, which would significantly increase operating costs.
6. Extremely High ESG Risk, Brand and Stock Price Under Impact: Frequent oil spills in Venezuela have severely contaminated Lake Maracaibo. If a U.S. giant intervenes, images of its logo appearing on oil-stained beaches will trigger immense international public pressure. This could lead not only to legal accountability from environmental organizations but also potentially cause a sharp drop in stock price, with losses far exceeding the profits from oil.
7. Prominent Security Risks, Facilities Vulnerable to Attack: Oil facilities are fixed assets that are highly susceptible to becoming targets of attacks. Against the backdrop of Venezuela's political instability and unresolved risks of violent conflict, the lack of stable security guarantees renders any extraction plans merely empty talk.
8. Fragile Supply Chain, Dependent on External Support: Venezuela cannot even independently produce the "diluent" necessary for extracting extra-heavy oil. All extraction activities rely on the smooth operation of the external supply chain. The fluctuation of sanctions or a supply chain disruption could cause the entire investment chain to collapse instantly. Fragile Supply Chain, Dependent on External Support: Venezuela cannot even independently produce the "diluent" necessary for extracting extra-heavy oil. All extraction activities rely on the smooth operation of the external supply chain. The fluctuation of sanctions or a supply chain disruption could cause the entire investment chain to collapse instantly.

(3) Insufficient Economic Feasibility, Industry Trends Running Counter

From a purely economic perspective, investing in Venezuelan oil is also completely unfeasible. According to estimates from Rystad Energy and Wood Mackenzie, the breakeven point for bringing Venezuelan heavy crude to market is approximately $80 per barrel. However, the current WTI oil price is below $60 per barrel, and Venezuelan heavy crude typically trades at a discount relative to WTI, making profitability impossible.

More importantly, the petroleum industry has shifted from "long-cycle investments" (such as Canadian oil sands, with a resource lifespan measured in decades) to "short-cycle investments" (such as U.S. shale oil, where investments can be recouped within a few years). Venezuelan oil projects, however, represent a typical long-cycle investment, which runs counter to this industry trend. Additionally, over the past decade, the U.S. oil sector has been the worst-performing industry in the S&P index. Shareholders now demand exceptionally high returns on capital and are absolutely unwilling to support large-scale, long-cycle overseas investments in high-risk environments.

For American giants, the global market offers more and better options: shale oil in Texas, offshore oil fields in Guyana, new discoveries in Namibia, and so on. Although these regions may not match Venezuela in terms of reserves, they come with controllable risks and stable returns, making them far more attractive than Venezuela's "toxic assets." As one executive anonymously stated, "We are not short of crude oil; what we lack is a predictable business environment."

III. Case Study: Why is Chevron's "Stay-Behind" Strategy Not Replicable?

Among the major oil companies, only Chevron remains in Venezuela, struggling to hold on, but this is not because the local market offers investment value; rather, it possesses "unique and irreplicable conditions."

Chevron's core advantage lies in holding a "special exemption," and its operational model in Venezuela resembles more of a "debt recovery" process: most of the extracted crude oil is directly shipped to U.S. refineries to offset historical debts owed to it. Additionally, Chevron has committed to increasing its current production capacity of 10,000 barrels per day by 50% within the next few months. However, even with this expansion, its output growth will have a negligible impact on the global heavy oil market. For other U.S. oil companies, they lack the historically rooted special access that Chevron enjoys, making it impossible for them to replicate its model.

IV. Deep-Seated Game: The Essential Nature of the Meeting and the Realistic Contradictions of Trump's Strategy

The essence of this White House closed-door meeting is not merely an "investment invitation," but rather a game of chess between the Trump administration and the oil giants. Trump needs the endorsement of these giants to prove that his Venezuela policy "has a viable path"; meanwhile, the giants leverage the White House platform to "raise their entry conditions sky-high." The statement by ExxonMobil's CEO that he "cannot invest" carries the underlying message to Washington: Unless 100% political insurance, tax exemptions, and a complete resolution of historical debt and asset issues are provided, not a single penny will be invested.

Trump's strategic intentions appear grand, yet they harbor numerous practical contradictions: Firstly, rebuilding trust is extremely difficult. American oil companies have been expelled from Venezuela for decades, lacking understanding of the local situation. Rebuilding trust and the investment environment may take 20-30 years, making it hard to achieve breakthroughs in the short term. Secondly, control over oil prices is limited. Even if Venezuela's production is successfully increased, Russia and OPEC+ can still influence oil prices through measures like adjusting output and creating regional tensions. Relying solely on controlling Venezuela is insufficient to shake the global oil price landscape. Thirdly, strategic gains are questionable. Investing massive funds to rebuild Venezuela's infrastructure carries the risk of future regime changes, potentially leading to a "total loss" outcome.

V. Profound Revelation: Resources Do Not Equal Wealth; Rules Are the Cornerstone of Prosperity.

The incident of U.S. oil giants collectively refusing to invest in Venezuela has brought profound enlightenment to the world: Venezuela's tragedy lies in the fact that, despite "sitting on a gold mine," it has turned itself into an "isolated island" due to a lack of rules and stability. This event exposes the harsh truth under the logic of energy hegemony—resources themselves do not represent wealth.

Only in a soil where the rule of law is robust, infrastructure is well-developed, and society is stable can resources be transformed into genuine prosperity. As long as Venezuela's business environment remains a "combination of the law of the jungle and ruins," its billions of barrels of crude oil will continue to lie dormant underground. The reservations of U.S. energy giants are not only a "verdict" on Venezuela but also a warning to all nations worldwide that rely on resource dividends while disregarding rules: abandoning the commitment to rules and stability means even the richest resources cannot bring sustained prosperity.

For the American oil industry, the choices made by the giants reflect a rational return to industry norms: under the pressure of shareholder returns and the demand for controllable risks, "stable expectations" are far more attractive than "vast reserves." Venezuela's oil may never lack "coveters," but before its business environment and regulatory system undergo fundamental improvements, it is destined to remain a "hot potato" that no one dares to touch.