Exxon Takes First Step Toward Investing in Venezuela

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1. 49m ago

   ExxonMobil signs MoU with PDVSA to evaluate Venezuela oil return

   ExxonMobil has signed a non-binding memorandum of understanding with Venezuela's state oil company PDVSA, marking its first formal step toward re-entering the country nearly two decades after its assets were expropriated. The agreement grants Exxon a year to assess oil opportunities, including its former Orinoco Belt project, without committing to investment. The move follows the Biden administration's temporary easing of sanctions on Venezuela's oil sector in late 2023, which created a window for major Western oil companies to explore a return. Exxon previously called Venezuela "uninvestable" after the 2007 nationalization of its Cerro Negro heavy-oil project.

   Why it matters

   Exxon's departure in 2007 after Hugo Chavez's government seized its assets made it a symbol of resource nationalism's risks. A potential return would signal a significant shift in both Exxon's strategy and Venezuela's investment climate, potentially unlocking billions in capital for the country's degraded oil infrastructure. The MoU is preliminary and non-binding; any future investment would require a specific license from the U.S. Treasury Department and resolution of Exxon's pending arbitration claim against Venezuela for the expropriation.

   What is confirmed

   • ExxonMobil signed a memorandum of understanding with PDVSA to evaluate oil opportunities in Venezuela.
   • The MoU is non-binding and gives Exxon a year to assess areas including its former Orinoco project.
   • Exxon left Venezuela in 2007 after the government expropriated its Cerro Negro heavy-oil project.
   • The agreement follows the U.S. easing of sanctions on Venezuela's oil sector in late 2023.

   Still unconfirmed

   • Exxon may pursue a broader return to Venezuela if evaluation results are favorable and sanctions relief continues.
   • Chevron and other majors could follow Exxon's lead in signing preliminary agreements with PDVSA.

   What to watch next

   • U.S. Treasury Department action on specific licenses for any future Exxon investment
   • Progress of Exxon's arbitration claim against Venezuela for the 2007 expropriation
   • Results of Exxon's technical evaluation within the one-year MoU period
   Sources used for this update (13)

   1. www.nytimes.com — The New York Times - Breaking News, US News, World News and Videos
   2. www.washingtonexaminer.com — The fussiness of small potatoes and fancy wine
   3. www.marinelink.com — Ukraine Renews Attacks On Russian Oil Refineries
   4. WSJ — Exxon Takes First Step Toward Investing in Venezuela
   5. Reuters — Exxon signs preliminary agreement with Venezuela to assess oil opportunities
   6. Bloomberg.com — ExxonMobil Signs Deal in Step Toward Re-Entering Venezuela
   7. Financial Times — ExxonMobil explores return to Venezuela after calling nation ‘uninvestable’
   8. The New York Times — Exxon Strikes Preliminary Deal to Return to Venezuela
   9. qz.com — Exxon signed non-binding deal to explore Venezuela oil
   10. Quartz — ExxonMobil signed preliminary oil deal with Venezuela and PDVSA
   11. Semafor — ExxonMobil eyes Venezuela return after two decades
   12. NPR — Oil giant ExxonMobil left Venezuela years ago. Now it's considering a return
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