US companies express caution on Venezuela investment, citing risks and instability
Washington (The Uttam Hindu): US President Donald Trump is encouraging American companies to invest in Venezuela to revive its oil industry. A key meeting was held at the White House on Friday in this regard. However, Darren Woods, CEO of the world's leading oil company, ExxonMobil, dashed Trump's enthusiasm and made it clear that the Latin American country is currently not a safe investment destination. Woods cited instability and outdated laws as obstacles to business.
Instability and outdated laws are the biggest hurdles
ExxonMobil's CEO stated bluntly at the meeting that Venezuela's current legal system is extremely unstable and offers no investment security. He stated that operating there is impossible with outdated hydrocarbon laws and dilapidated infrastructure. According to Woods, unless fundamental improvements are made to the country's business structures and infrastructure, moving there could prove to be a losing proposition for American companies.
'Property was confiscated twice, now we will proceed with caution'
During the meeting, Darren Woods also shared the company's past experiences. He explained that ExxonMobil first entered Venezuela in 1940, but its assets there have been confiscated twice. This is why the company wants to proceed very carefully before entering there a third time. Woods stated that a third entry would require significant changes to the historical and current landscape. Without permanent safeguards and changes to the laws, the investment risk cannot be taken.
Trump claims companies are queuing up
While ExxonMobil expressed concern, President Trump's stance appeared quite aggressive. Trump claimed that oil company officials were lining up like "beehives" to take advantage of the opportunities in Venezuela's oil industry. He pressured the companies present at the meeting, saying that if they did not want to invest, they should tell him, as 25 others were standing outside ready to take their place. Trump also made it clear that the government would not provide any financial guarantees from taxpayer money for any risky investment. He assured that the companies would be provided "complete security" without the deployment of the US military.
The technical team will go and inspect
Despite concerns, ExxonMobil's CEO expressed hope that the United States could help bring about the necessary changes. He stated that Exxon would soon send a technical team to Venezuela to assess the ground realities of the oil infrastructure. Woods stated that before making a final investment decision, it would be necessary to assess the financial sustainability of the security measures, the profitability, and the legal framework there.