ExxonMobil CEO Darren Woods mentioned with extraordinary bluntness at a White House gathering of oil executives Friday that the corporate wouldn’t be diving headfirst into Venezuela, saying the present state of affairs on the bottom presents an unacceptable danger to the corporate.
“If we look at the legal and commercial constructs and frameworks in place today, in Venezuela today, it’s uninvestible, and so significant changes have to be made to those commercial frameworks, the legal system,” Woods mentioned. “There has to be durable investment protections, and there has to be a change to the hydrocarbon laws in the country.”
Exxon left Venezuela in 2007 when the Chavez regime nationalized the oil industry. Exxon wouldn’t settle for the nation’s phrases, and the federal government seized the corporate’s property there.
To return in full and restore Venezuela’s dilapidated oil infrastructure, Woods advised Exxon would want to be satisfied that the nation had a steady political system, protections from crime and theft, and modifications to Venezuela’s legal guidelines that require international corporations to enter majority-government-run joint ventures and taxes of 60% on oil proceeds.
Woods mentioned he was assured the Trump administration may make these needed modifications. But to even perceive what sort of return on funding Exxon would get from Venezuela, Woods mentioned a lot of questions want to be answered first.
“The questions will ultimately be: How durable are the protections from a financial standpoint? What are the returns look like? What are the commercial arrangements, the legal frameworks?” Woods requested. “All those things have to be put in place in order to make a decision, to understand what your return would be over the next several decades that these billions of dollars of investments would be made on.”
Pressed by President Donald Trump on a timetable for a return, Woods mentioned the corporate may return with a scout group to assess the state of affairs and make determinations about what could be required for a bigger comeback.
“We can we can hit the ground and within the next couple of weeks, start the assessment, and then from there, we need to understand what’s needed,” Woods mentioned.