Washington presses oil groups on Venezuela

Donald Trump’s administration is making a fresh attempt to draw U. S. oil companies into Venezuela, offering regulatory relief and political backing as Washington tries to turn the country’s vast crude reserves into a strategic and commercial prize. Yet the campaign is meeting resistance from executives wary of sinking billions into a battered industry still shadowed by political risk, legal uncertainty and years of neglect.

The push comes almost three months after Nicolás Maduro was removed from power in a U. S.-backed operation that upended Venezuela’s political order and triggered a sharp shift in Washington’s approach to Caracas. Since then, the White House has moved to loosen parts of the sanctions framework, engage with the interim leadership now headed by Delcy Rodríguez, and encourage foreign investment in both oil and mining.

That has created a striking opening on paper. Venezuela holds some of the world’s largest crude reserves, and its heavy oil has long been of interest to U. S. refiners, particularly along the Gulf Coast. Trump has publicly argued that reviving Venezuelan production could help energy markets and lower costs, while officials have explored ways to expand licences and other incentives for U. S. producers willing to re-enter the country.

But enthusiasm inside boardrooms has been limited. Chevron remains the only American major with an established operating foothold in Venezuela, and even that position reflects years of stop-start sanctions waivers and tightly managed production arrangements. Other companies once active there, including Exxon Mobil and ConocoPhillips, still carry the scars of asset seizures and arbitration disputes dating back to the Chávez era. For them, the commercial case is entangled with unresolved claims and memories of abrupt policy reversals.

Executives and analysts also point to the scale of the physical challenge. Venezuela’s oil network, from wells and pipelines to upgraders and export terminals, has suffered prolonged underinvestment, operational breakdowns and the flight of skilled labour. Restoring output on a meaningful scale would require far more than a diplomatic thaw. It would demand large capital commitments, stable legal protections, functioning infrastructure and confidence that the policy line in Washington would hold long enough for projects to pay off.

Those concerns help explain why the administration’s courtship has produced only limited movement. Talks have advanced with companies already near the market or already exposed to it, while a broader rush has yet to materialise. Chevron and Shell have been linked to negotiations over energy projects, with Shell showing greater interest on the gas side, especially in fields tied to Trinidad and Tobago’s processing network. That is a narrower and potentially more manageable proposition than plunging headlong into the rehabilitation of Venezuela’s oil heartland.

The gap between political ambition and commercial caution has become a defining feature of the U. S. strategy. Trump has framed Venezuela as a place where American firms can restore production faster than many industry specialists believe possible. Analysts following the sector, however, have warned that any sizeable increase in output would take time even under favourable conditions. Near-term gains may be modest, while larger recovery targets could take years.

Washington’s moves in Caracas have also raised questions beyond the energy business. The U. S. decision to recognise Rodríguez, lift sanctions on her personally and support the transfer of control over overseas Venezuelan assets such as Citgo marks a substantial break from the previous framework. At the same time, senior U. S. officials have continued to speak of a transitional phase and eventual free elections, signalling that the political settlement remains unfinished.

That unresolved backdrop feeds corporate hesitation. Energy groups are accustomed to geopolitical risk, but Venezuela presents an unusually dense mix of hazards: disputed legitimacy, exposure to sanctions policy, fragile institutions, possible contract reviews, security concerns and the chance that a future administration in Washington could again redraw the rules. Companies that survived one cycle of nationalisation and sanctions are reluctant to walk into another without stronger assurances.

For Caracas, the lack of eager takers is a reminder that possessing giant reserves is not the same as attracting capital. The country can offer abundant crude, but investors also want enforceable contracts, credible governance and a reliable route to profits. The interim government has tried to signal a more pragmatic stance, and U. S. officials have praised reform efforts in the energy sector. Whether that is enough to shift sentiment remains unclear.