President Donald Trump has encouraged American oil companies to reinvest $100 billion in Venezuela to spur energy production and to rescue Venezuelans from desperate poverty.
Oil companies, however, are taking stock of the decrepit state of Venezuela’s energy infrastructure after decades of communism, and seeing a number of critical impediments.
“We’re going to have our very large United States oil companies—the biggest anywhere in the world—go in, spend billions of dollars, fix the badly broken infrastructure,” Trump stated in a Jan. 11 press conference following a meeting with top oil executives.
Venezuela has the world’s largest known oil reserves, estimated by rating agency S&P at 300 billion barrels, which are located in a region along the Orinoco River called the Orinoco Belt. At its peak—and with investment and expertise from oil majors including Exxon Mobil, ConocoPhillips, Chevron, BP, Total, and Norway’s Statoil—Venezuela produced more than 3 million barrels per day and was America’s largest foreign supplier.
America’s gulf coast refineries were built to process the heavy sour crude from Venezuela, and they can refine it much more efficiently than the light crude produced from fracking. But trade with Venezuela slowed to a trickle after then-president Hugo Chavez seized the assets of western oil companies in 2007, leading to the imposition of U.S. sanctions. Since Venezuela’s wells and other equipment were nationalized, output collapsed by about 70 percent and is currently less than 1 million barrels per day, according to statistics website Worldometer.
Venezuela thus presents a massive opportunity for Western oil companies to rebuild what had once been a top global oil producer. But daunting problems remain.
“Commercially, the upside is long-life reserves, portfolio diversification, and service and infrastructure opportunities if the country becomes investable again,” Jason Isaac, CEO of the American Energy Institute, told The Epoch Times.
“But the investment case only works if companies can actually control operations, get paid, and move barrels transparently—otherwise the ‘gain’ is trapped capital and political risk.”
Venezuela Currently ‘Uninvestable’
On Jan. 9, Exxon Mobil CEO Darren Woods expressed little enthusiasm for an immediate return to Venezuela, stating in a meeting hosted by Trump at the White House that the country, in its current state, is “uninvestable.”
“We’ve had our assets seized there twice,” Woods said. “And so, you can imagine to re-enter a third time would require some pretty significant changes from what we’ve historically seen here and what is currently the state.”
In an aerial view, the Exxon Mobil Baytown Refinery is seen in Baytown, Texas, on Jan. 13, 2026. President Donald Trump has threatened to sideline Exxon Mobil from Venezuela’s energy market after expressing that he “didn’t like Exxon’s response,” while making a push for oil companies to begin investing there. Exxon remains interested and is prepared to send a team to assess the existing oil infrastructure. Brandon Bell/Getty Images
Patrick Pouyanne, CEO of Total, likewise said that he would consider investing in Venezuela again at some point, but it is “not high on my agenda.”
Venezuela first expropriated the assets of western oil companies in the 1970s and again in 2007. By contrast to many governments in the Middle East and Africa that had done the same, Venezuela refused to compensate oil companies for their losses, leading the companies to sue and win in U.S. and international courts, claiming damages of around $60 billion.
Oil companies will likely want these claims to be paid before putting new money into Venezuela, but the country has little means to do so. Oil production has dwindled to less than 1 million barrels per day and, even at that level, still comprise about two-thirds of the government’s entire budget. China has replaced the United States as the top importer of Venezuelan oil, currently buying an estimated 80 percent of it, but at a discount.
And while Venezuela faces tens of billions of dollars in claims from western oil companies, it is now indebted to China as well. According to the U.S.-China Economic and Security Review Commission, Chinese banks have at least $10 billion in outstanding loans to Venezuela.
