invest

Today Trump brought the heads of Exxon, Chevron, ConocoPhillips and many other oil giants into the White House. He talked about something like a $100 billion investment, promised U.S. protection, and warned Russia and China to keep their hands off. 

But there is a fundamental difference between systems imposed by the state (like China), versus the U.S. In China, if the top leader says “go build,” a company might grumble in private but it will die trying. In the U.S., you can’t order private companies to sink tens of billions into a country and just hope they salute. There are shareholders, lawyers, insurers, boards, and risk people involved. The oil tycoons will happily try to join forces, but the market is their true boss. Trump has to convince the private sector that the money will be safe and that’s exactly where up to this point, the new regime in Venezuela is still failing the test.

An oil project doesn’t get approved because someone “likes the idea” or gets mandated. First, the company tries to prove the oil is really there and worth extracting (surveys, test wells, production forecasts). Then they price the whole mess: what it’ll cost to fix old equipment or build new stuff, how long it’ll take, and what could go wrong. Finance teams run scenarios like a nervous pilot checking every gauge: oil prices, delays, tax changes, accidents, expropriation. Lawyers obsess over the contract details (who owns what, who can change the rules, where disputes get decided). And here’s the institutional reality check: if courts can’t be trusted, contracts are just paper, and if nobody can say who truly controls the police, the military, and the streets, then there’s no safeguard (especially if there’s reluctance to enact more force by the US). Only if the numbers still work after all that, and the risks can be insured or controlled, does the board sign off on the “final investment decision,” which is the moment the company stops talking and starts spending real billions of dollars. So from first study to first meaningful barrels, you’re usually talking 18–36 months for a brownfield restart (in existing/old facilities), and 3–7 years for a bigger rebuild or new development (which seems to be Trump’s appetite).

These things will be discussed behind closed doors, not in the media show presented today, and we’ll learn more soon enough.

Here’s a prospective roadmap, on what could happen, depending on the type of work:

6 months

The companies already present in Venezuela will probably invest quickly in debottlenecking (“low-hanging fruits”) that requires low investment and gradually increases production.

Most companies will commit to starting an exploratory technical and commercial feasibility process to assemble a development business plan for the country. This only requires bringing in a limited technical team, so upfront costs will be very low, and any of these companies can take the risk without long-term guarantees (if they lose that money and time, who cares). Trump will guarantee security for the personnel sent to Venezuela.

Based on private agreements around buying Venezuelan assets (privatization), new exploration, asset expansion, etc., Trump will instruct the interim leadership so that PDVSA and Congress enable those actions.

The first privatizations begin to be announced (the least complex and most obvious ones), those requiring the least purchase investment and the least production-recovery investment. I think this could happen even before free elections, because as Trump said, most of these companies are used to operating in some of the most sinister places in the world.

Engineering phases move forward to restore basic services needed to operate facilities (especially electricity supply). Stabilizing the country’s electrical system is fundamental for the oil industry.

6 to 18 months

Engineering advances for larger-scale projects that can meaningfully increase production. Again, this is very low-cost for the companies, and they take relatively little risk moving these forward even if they may have to cancel later.

Gradual production increases materialize as the debottlenecking projects (“low-hanging fruit”) come online.

FID (Final Investment Decision) might happen for some small or medium-sized projects, with U.S. guarantees that the government cannot expropriate them.

18 months +

This is where it gets interesting, because a democratic transition becomes fundamental for these companies to make FIDs to buy major PDVSA assets or execute greenfield projects (new plants, new infrastructure, etc.).

Remember: most of these companies are publicly traded. They will invest in projects with the highest returns at an acceptable level of risk. If the Trump administration cannot guarantee long-term stability through a healthy democracy, it’s likely these companies won’t risk huge sums of money.

The pace will also be dictated by expectations for oil prices at the time. If prices are expected to be low, investment will move more slowly.

This entire analysis also somewhat ignores the complexity of human talent in the country. It will be uphill to find the talent needed to execute these projects and operate the plants, and that could stretch timelines even further. Venezuela once had it, but it’s now dispersed all over the world (including Venezuela).

That’s why the political transition has to move fast. If Trump wants serious capital to be involved, the reforms have to be visible and irreversible, starting with unmistakable signals that the old regime’s habits are gone. A clean first step that could be an important signal: free every political prisoner. Not a symbolic handful. All of them. 

Big projects don’t live on election cycles, they live on 10–20-year timelines for ROI. If investors think the whole arrangement can be shaken up after the 2028 election (due to the Democrats retaining the White House), they’ll hesitate, or they’ll demand terms so protective that Venezuela’s interim regime won’t like them.

Venezuela’s economic restart and Venezuela’s political liberation are the same project. You don’t get one without the other. If the transition wants oil money to actually land it has to build the boring stuff that makes capitalism work: credible courts, enforceable contracts, and proof that the control of violence is achieved.

United States President Donald Trump has called on oil executives to rush back into Venezuela as the White House looks to quickly secure $100bn in investments to revive the country’s ability to fully tap into its expansive reserves of petroleum.

Trump, as he opened the meeting with oil industry executives on Friday, sought to assure them that they need not be sceptical of quickly investing in and, in some cases, returning to the South American country with a history of state asset seizures as well as ongoing US sanctions and the current political uncertainty.

“You have total safety,” Trump told the executives. “You’re dealing with us directly and not dealing with Venezuela at all. We don’t want you to deal with Venezuela.”

Trump added: “Our giant oil companies will be spending at least $100bn of their money, not the government’s money. They don’t need government money. But they need government protection.”

Trump welcomed the oil executives to the White House after US forces earlier on Friday seized their fifth tanker over the past month that has been linked to Venezuelan oil. The action reflected the determination of the US to fully control the exporting, refining and production of Venezuelan petroleum, a sign of the Trump administration’s plans for ongoing involvement in the sector as it seeks commitments from private companies.

“At least 100 Billion Dollars will be invested by BIG OIL, all of whom I will be meeting with today at The White House,” Trump said on Friday in a predawn social media post.

The White House said it invited oil executives from 17 companies, including Chevron, which still operates in Venezuela, as well as ExxonMobil and ConocoPhillips, which both had oil projects in the country that were lost as part of a 2007 nationalisation of private businesses under former President Nicolas Maduro’s predecessor, Hugo Chavez.

“If we look at the commercial constructs and frameworks in place today in Venezuela, today it’s un-investable,” said Darren Woods, ExxonMobil CEO. “And so significant changes have to be made to those commercial frameworks, the legal system, there has to be durable investment protections and there has to be change to the hydrocarbon laws in the country.”

Benjamin Radd, a senior fellow at the UCLA Burkle Center for International Relations, told Al Jazeera that he had “noted the hesitation and less-than-full-throated enthusiasm for re-entering the Venezuelan market”, citing Woods, who told the gathering that the company had its assets there seized twice already.

“The bottom line is that until Trump can outline and provide assurances of a plan towards political stability, it will continue to be a risky endeavour for these oil companies to re-engage Venezuela. And what is there is a regime change in Iran in the days or weeks or months to come, and all of a sudden that re-emerges as a place where Western oil companies can do business? Even though the reserves don’t equal what Venezuela has, the risk is far less, and the infrastructure is more sound,” Radd said.

Other companies invited included Halliburton, Valero, Marathon, Shell, Singapore-based Trafigura, Italy-based Eni and Spain-based Repsol, as well as a vast swath of domestic and international companies with interests ranging from construction to the commodity markets.

Wait and see

Large US oil companies have so far largely refrained from affirming investments in Venezuela, as contracts and guarantees need to be in place. Trump has suggested that the US would help to backstop any investments.

Venezuela’s oil production has slumped below one million barrels per day (bpd). Part of Trump’s challenge to turn that around will be to convince oil companies that his administration has a stable relationship with Venezuela’s interim President Delcy Rodriguez, as well as protections for companies entering the market.

While Rodriguez has publicly denounced Trump and the abduction and ouster of Maduro, the US president has said that to date, Venezuela’s interim leader has been cooperating behind the scenes with his administration.

Most companies are in a wait-and-see mode as they await terms from the Venezuelans, stability and wait to find out how much the US government will actually help, said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security.

Those like Chevron that are already in there are in a better position to increase investments as they “already have sunk costs”, Ziemba pointed out.

Ziemba said she expects a partial ramp-up in the first half of this year as the volumes that were going to China – Venezuelan oil’s largest buyer – are redirected and sold via the US. “But long-term investments will be slow,” she said as companies wait to find out about US commitments and Venezuelan terms.

Tyson Slocum, director of the consumer advocacy group Public Citizen’s energy programme, criticised the gathering and called the US military’s removal of Maduro “violent imperialism”. Slocum added that Trump’s goal appears to be to “hand billionaires control over Venezuela’s oil”.

So far, the US government has not said how the revenue from the sale of Venezuelan oil will be shared and what percentage of the sales would be given to Caracas.

Ziemba said she was worried that “if funds do not go to Venezuela for basic goods, among other local needs, there will be instability that will deepen the country’s economic crisis“.

In the news conference on Friday, Trump said the US had a formula for distributing payments. UCLA’s Radd said that “if the US can or will guarantee security and stability, it makes sense for it to expect a return on investment in that sense. But then this makes it sound more like a mafia-style ‘racket’ than a government-led operation”, he told Al Jazeera.

Meanwhile, the US and Venezuelan governments said on Friday they were exploring the possibility of restoring diplomatic relations between the two countries, and a delegation from the Trump administration arrived in the South American nation on Friday.