After removing Venezuelan President Nicolás Maduro over the weekend, U.S. President Donald Trump expressed his belief that American oil companies would enter Venezuela, invest billions, and generate substantial profits for both themselves and the Venezuelan populace. He emphasized the intention to “reclaim the oil, a move that should have been made long ago.”
Venezuela boasts the largest proven oil reserves globally, but the ownership and exploitation rights of these reserves remain contested, accompanied by significant historical issues. The country nationalized its oil industry many years ago, and in 2007, it confiscated the majority of U.S. oil assets, leading to the expulsion of two out of three American companies from the nation.
Ongoing legal battles persist regarding the owed compensation amounting to billions of dollars that these companies claim Venezuela owes them. Given these circumstances, the swift return of these companies into Venezuela remains uncertain.
The tenure of Hugo Chavez as Venezuela’s president began in 1999, marked by his commitment to diminishing U.S. influence within the nation. At the time, Venezuela was a significant oil producer, with substantial control held by three U.S. corporations: ConocoPhillips, ExxonMobil, and Chevron.
Chavez significantly expanded the nationalization of the oil industry in 2007, compelling these companies and others to cede operational control to the state-owned Petróleos de Venezuela S.A. (PDVSA) while maintaining minority stakes. Consequently, Venezuela gained control of up to 83% of the projects situated in the lucrative Orinoco River Basin.
While Chevron remained operational, ConocoPhillips and ExxonMobil departed Venezuela after failed negotiations with the government. ConocoPhillips recorded a $4.5 billion U.S. investment write-off due to the situation. Chevron, benefiting from a special license, continues to extract and export oil despite stringent U.S. sanctions on Venezuela’s oil sector.
The expropriation of assets under Chavez’s regime initiated a protracted compensation battle that continues to date. ExxonMobil claimed $10 billion in compensation, leading to a $1.6 billion ruling by the International Centre for Settlement of Investment Disputes (ICSID) in 2014. ConocoPhillips, in a separate ICSID case, was awarded $8.5 billion, a decision upheld by an international arbitration court in January 2025.
Trump’s recent statement regarding U.S. companies re-entering Venezuela simplifies a complex scenario. Restoring Venezuela’s deteriorated oil infrastructure, exacerbated by Chavez, Maduro, and U.S. sanctions, could require over $100 billion and a decade to rectify.
The decision for U.S. companies to reinvest in Venezuela hinges on multiple factors, including safety and viability. Chevron remains focused on safeguarding its current 3,000 employees in Venezuela, with no expansion announcements. ConocoPhillips refrained from speculating on future investments due to past expropriations in the country.
Given the current circumstances, which include U.S. assertions of control over Venezuela, decisions regarding the nation’s oil industry appear to be influenced by external powers. U.S. officials, including Secretary of State Marco Rubio, have emphasized restricting adversaries’ involvement in Venezuela, despite China being the country’s primary oil consumer. Rubio questioned the necessity for global powers like China, Russia, and Iran to rely on Venezuelan oil under the current circumstances.
