Chevron’s dilemma in Venezuela: Support Trump’s vision without losing money

Chevron wanted a piece of Nicolás Maduro’s Venezuela so it could make significant investments when the country’s political fortunes changed.

- Collin Eaton & Emily Glazer

Chevron lobbied hard for proximity to oil wealth in Venezuela, but has little appetite for big investments there in the near term

(REUTERS)

The strongman is out, but President Trump’s Venezuela doesn’t look much different.

Trump is pressing U.S. oil companies to pour $100 billion into Venezuela's dilapidated oil sector—and to do so as soon as possible—following Maduro’s dramatic ouster this month. But a rapid escalation in oil investments in Venezuela is n’t in the cards, even for Chevron, the only U.S. oil company operating in the oil-rich Latin American country, people close to the company said.

Before making a big investment there, oil executives want to see stability in the country and higher oil prices that translate to profits, some of the people said. Chevron’s caution shows how far Trump's aspirations for a speedy Venezuelan oil revival are from what the U.S. oil industry considers to be a realistic timeline.

The divide will test the leadership of Chief Executive Officer Mike Wirth, who will have to balance the wishes of an impetuous president with his obligation to shareholders to make prudent investments. Trump has yet to offer any public concessions that would spur investment.

The president hopes his plan will bring U.S. oil prices down to $50 a barrel, a target running counter to the energy industry's interests. Under that scenario, the corresponding price tag on the heavy, viscous crude pumped in Venezuela would be in the high-$30s range.

“That’s not economic,” said Amos Hochstein, a managing partner at the investment firm T W G, who served as an energy adviser to President Joe Biden. “You can’t spend billions of dollars on oil that’s sub-$40. That doesn’t happen anywhere in the world.”