ExxonMobil signs Venezuela MOU as it weighs return to oil sector

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ExxonMobil signs Venezuela MOU

Highlights

ExxonMobil signed a memorandum of understanding with Venezuela and PDVSA to evaluate upstream oil sector opportunities, but no investment commitment yet.
Venezuela's new hydrocarbons law and policy shift have attracted U.S. and international industry interest, with Chevron planning to double production under a $7 billion initiative.
The U.S. government supports industry expansion in Venezuela, backing Delcy Rodríguez’s administration and securing a 35% Pentagon stake in key oil reserves.

Memorandum sets terms for possible re-entry

As reported by Financial Times, ExxonMobil said on Monday it has signed a memorandum of understanding with the Venezuelan government and state oil company PDVSA to evaluate potential upstream opportunities in the country.

The company says the agreement is only an initial step and does not commit it to investment. Exxon adds that any future spending would depend on stable policies, clear regulations, strong investment protections and competitive returns, while MOUs are generally nonbinding.

Exxon exited its exploration and production positions in Venezuela nearly 19 years ago. The company had remained cautious for much of this year, with chief executive Darren Woods saying in January that the country was “uninvestable” without significant changes to its commercial and legal system, and repeating on the October 30 third-quarter earnings call that progress is under way but that he is not rushing in.

Policy shift draws wider industry interest

Venezuela's National Assembly earlier this year passed a hydrocarbons law aimed at opening the oil sector to private companies, reversing about a quarter century of state dominance. That policy shift is helping attract fresh interest from U.S. and international groups as Washington increases its influence over the sector following the January capture of President Nicolás Maduro.

Exxon joins Continental Resources in exploring a deeper presence in the country, while some rivals have already moved beyond preliminary agreements. Chevron, which never left Venezuela, says it will double oil production there over the next five years under a $7 billion plan, and Eni and General Electric have also announced deals.

The Trump administration is encouraging producers to expand operations in Venezuela as it pursues a U.S.-led energy sphere of influence in the region. Following Maduro's removal, Washington backed Delcy Rodríguez to lead the country and oversee reforms, and her administration has opened the resources sector to U.S. investment, including a deal giving the Pentagon a 35% stake in a company controlling a substantial share of Venezuela's oil reserves.

Earlier, we reported that the WTO forecast Middle East exports to fall 17% in 2024 due to war-related disruptions.

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