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ExxonMobil, the largest energy company in the United States, is in advanced negotiations to acquire oil production rights in Venezuela, nearly two decades after the government of Hugo Chávez expelled it from the country, the New York Times reported this Thursday.
The potential agreement, which could be announced before the end of May, would involve contracts to produce oil in up to six fields in different regions of the country, according to individuals familiar with the negotiations who spoke on condition of anonymity.
Exxon declined to comment publicly on the discussions. The Venezuelan government and the state-owned PDVSA also did not respond to requests for comment.
The shift is notable: just in January of this year, the company classified Venezuela as a "non-investable" country.
In a meeting with President Donald Trump on January 9, the CEO of Exxon, Darren Woods, was explicit: “Our assets have been seized twice, so you can imagine that re-entering a third time would require quite significant changes.”
His position has changed since then. In a first-quarter earnings call held this month, Woods noted that Exxon's experience with heavy crude from Canada gives it an advantage in Venezuela, where most of the oil has similar properties.
"The investment and the returns look promising. I feel positive about what is happening, the opportunity that exists," he stated.
A group of Exxon employees traveled to Caracas in April to assess the oil fields offered by the Venezuelan government, according to one source consulted by the Times.
The political backdrop largely explains the acceleration of negotiations. Following the fall of Nicolás Maduro in early January, Trump appointed Delcy Rodríguez —the former vice president of Maduro who oversaw the oil industry during his administration— to manage Venezuela’s economic opening towards the United States.
Rodríguez reformed the Organic Law of Hydrocarbons in January to ease the conditions for foreign investors: direct contracts with PDVSA, tax exemptions, foreign bank accounts, and international arbitration clauses.
Attracting Exxon has become their top priority. According to someone familiar with the negotiations, "the return of a company that in popular imagination embodies American oil power is the cornerstone of Rodríguez's efforts to attract investment and win the favor of the Trump administration."
The history between Exxon and Venezuela is long and contentious. The company began operations in the country in the 1940s. In 2007, Chávez nationalized its projects in the Orinoco Belt, demanding a majority stake from PDVSA.
Unlike its competitors, Exxon refused to negotiate, abandoned the country, and initiated a lengthy legal battle in international courts. Venezuela still owes it approximately 1 billion dollars in damages recognized by those arbitrations.
After its departure, Exxon redirected its investments to Guyana, Venezuela's neighbor and rival, developing fields in the Atlantic that are also claimed by Caracas, making it a frequent target of Maduro's attacks.
Several factors accelerated the change in stance. The war in Iran raised global oil prices, making investments in new markets more attractive.
Moreover, in April, its main rival, Chevron, increased its stake in Petroindependencia from 35.8% to 49% through an asset swap with PDVSA, solidifying its position in one of the largest crude oil reserves in the world. Several analysts pointed out that this expansion made it strategically unsustainable for Exxon to continue ignoring Venezuela.
If finalized, the agreement would mark Exxon’s return to a country with some of the largest oil reserves on the planet, ending nearly twenty years of confrontation with its socialist rulers and representing, according to the Times, a victory for President Trump.
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