ExxonMobil formalises talks with Venezuela on oilfield operations

ExxonMobil has formalised negotiations with Venezuela regarding the operation of one or more oilfields.

The company’s CEO, Darren Woods, had previously described the country as “uninvestable” due to the prevailing situation following the abduction of Nicolas Maduro.

The company, based in Spring, Texas, said in a statement that ExxonMobil had signed a memorandum of understanding with the Venezuelan government and the state-run company Petroleos de Venezuela SA for “potential upstream opportunities”.

The agreement is non-binding and does not commit Exxon to any specific project.

“While this MOU is a meaningful first step, any future investment would require stable policies, clear regulations, strong investment protections, and competitive returns,” Exxon said in its statement.

The company did not disclose which projects or oilfields it was evaluating. Exxon would need to sign a definitive joint venture or production-sharing contract before participating in exploration or production activities.

Should Exxon proceed, the move would mark a major return to Venezuela after the government of late President Hugo Chavez seized the company’s assets.

It would also represent a political victory for US President Donald Trump, who has sought to reshape Venezuela’s oil sector with US companies taking a leading role following the abduction of President Nicolas Maduro by American forces in January.

At a signing ceremony broadcast by state television channel VTV, interim President Delcy Rodriguez welcomed Exxon back, expressing hope that the memorandum would soon lead to concrete agreements.

“We are pleased to welcome you back,” Rodriguez said, adding that Venezuela hopes this partnership will benefit both Exxon and the Venezuelan people. She also stated that Exxon would invest under favourable conditions and within a framework of legal certainty designed to protect its operations.

Prior to nationalisation, Exxon held a 41.67% stake in the Cerro Negro heavy crude project, now known as Petromonagas, alongside a 50% stake in the La Ceiba project located in the southern Maracaibo basin.

Exxon subsidiaries filed an arbitration claim against Venezuela in 2007 before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

In 2014, ICSID ordered that Exxon be paid $1.6 billion plus interest. Venezuela challenged the ruling, and the dispute remains unresolved.

Earlier this year, after oil reforms spearheaded by Rodriguez opened the sector to new entrants, Exxon CEO Darren Woods noted that progress had been made on fiscal and legal terms, though he stressed that the company was “not in a rush”.