- Venezuela owes ConocoPhillips and ExxonMobil billions of dollars in arbitration claims after it nationalized the oil industry in 2007.
- Energy Secretary Chris Wright said those claims need to be paid but are not an immediate priority.
- Wright said the Trump administration’s immediate priority is stabilizing Venezuela.
The debts that Venezuela owes ConocoPhillips and ExxonMobil are not an immediate priority for the Trump administration after the overthrow of President Nicolas Maduro, Energy Secretary Chris Wright told CNBC on Wednesday.
“The huge debts that are owed Conoco and Exxon, those are very real and need to be recompensed in the future,” Wright told CNBC’s Brian Sullivan. “But that’s a longer term issue. That’s not a short-term issue.”
Conoco and Exxon filed arbitration cases against Venezuela after former President Hugo Chavez nationalized the oil industry in 2007. Venezuela owes Conoco about $10 billion and Exxon about $2 billion, according to a JPMorgan note published on Monday.
The Trump administration’s immediate priority is stabilizing Venezuela, Wright said.
“What we need to do with the revenue from those oil sales is stabilize the economy in Venezuela, stop the collapse of the Bolivar, prevent Venezuela from becoming a failed state,” the energy secretary said.
Conoco and Exxon exited Venezuela after the Chavez nationalization. Chevron remained and is the only U.S. oil major operating in the country through a special license issued by the Trump administration.
It will take time for U.S. oil majors to invest the billions of dollars needed to rebuild Venezuela’s eenergy infrastructure, Wright said.
“If you’re Exxon or Conoco and you’ve exited the country, you just need normal, commercial business conditions, rule of law and some security to go back in. That will take some time,” he said.
The Trump administration will work with Chevron on “incremental tweaks or changes” to allow their production to grow, he said.
Venezuelan production could grow by several hundred thousand barrels per day in the short to medium term, Wright said earlier at Goldman Sachs’ annual energy conference in Miami.
The energy secretary said the U.S. will control Venezuela’s oil sales indefinitely.
“We’re going to market the crude coming out of Venezuela — first this backed up stored oil and then indefinitely, going forward, we will sell the production that comes out of Venezuela into the marketplace,” Wright said at the Goldman conference.
“We need to have that leverage and that control of those oil sales to drive the changes that simply must happen in Venezuela,” the energy secretary said.
Trump will meet with oil executives at the White House on Friday, sources told CNBC’s Brian Sullivan. The CEOs of ExxonMobil and ConocoPhillips as well as a representative from Chevron are expected to attend the meeting.
