"A single tweet can change foreign policy, who dares to invest in Venezuela?" American oil companies: No guarantees, no investment

American oil giants are extremely cautious about returning to the Venezuelan market. Despite President Trump leveraging his strong influence over the energy market to pressure companies to invest, the industry is generally calling for Washington to provide clear legal and financial guarantees. Faced with the White House's ambition to reshape the global energy landscape, executives from American energy companies are skeptical, fearing that the unpredictability of policies will expose substantial capital to unbearable risks. In the latest move, President Trump demonstrated a strong control over the global crude oil market. According to reports from CCTV News and Xinhua News Agency, Trump not only announced the takeover of Venezuela's oil sector but also ordered U.S. special forces to seize a Russian oil tanker in the North Atlantic. Meanwhile, U.S. Energy Secretary Chris Wright held crucial talks with executives from Chevron and ConocoPhillips in Miami on Wednesday, conveying Trump's intention for American oil giants to invest billions of dollars into Venezuela's severely damaged energy industry. In response, oil industry executives plan to pressure the president during a meeting at the White House on Friday, demanding that the government provide strong guarantees before committing capital investments. Although Trump hinted earlier this week that companies investing in Venezuela might be reimbursed by the U.S. government or compensated from revenues, executives remain deeply concerned. Previously, the White House indicated that Washington would "indefinitely" control Venezuela's oil resources and is arranging for U.S. chartered vessels to transport millions of barrels of crude oil to U.S. Gulf Coast refineries for processing. This drastic geopolitical shift directly impacts investor confidence, with widespread concerns that the political and legal risks of the Venezuela project, along with a low oil price environment, will hinder substantial investments. A private equity investor focused on energy told the Financial Times, "If a tweet can arbitrarily change a country's foreign policy, no one wants to get involved." This uncertainty makes it unlikely that even if the U.S. government signals a relaxation of some sanctions and allows oilfield service companies to enter, it will lead to a large influx of infrastructure construction funds in the short term. Lack of Guarantee Mechanisms Hinders Capital Inflow U.S. energy companies generally believe that unless they receive formal endorsement from the government, it will be difficult to undertake large-scale projects in Venezuela. According to sources familiar with the plans, at the upcoming White House meeting, executives from energy giants including Chevron, ExxonMobil International, and ConocoPhillips are expected to clearly state to the president that strong legal and financial guarantees are needed. A senior executive from a large U.S. energy company told the Financial Times that for major companies to return to Venezuela, the government must provide "serious guarantees." He pointed out that it will take time before seeing real investments materialize, and increasing production will take even longer. Neil McMahon, co-founder of Kimmeridge, also emphasized that given the previous damaging experiences of companies, they will not commit funds without formal financial guarantees. Private equity investors also hold a wait-and-see attitude. A leading private equity investor stated that while their company is ready to start exploring projects, the risks in Venezuela are extremely high. He warned that unless the government provides guarantees, no publicly traded company accountable to its shareholders will invest capital in a country lacking a sound legal system and where there is a risk of asset confiscation. Policy Uncertainty Raises Long-term Concerns In addition to the current legal framework issues, investors are also concerned about the continuity of policies across presidential terms. Amos Hochstein, executive partner of investment group TWG Global and former advisor to President Biden, pointed out that investing in Venezuela is fraught with legal, financial, and political risks. He emphasized that after companies invest funds over the next three years, the return period will be delayed, and by then, Trump may no longer be president, so companies need to know whether they can still receive protection beyond Trump's term. Moreover, who to sign agreements with is also a core issue. Hochstein raised the question: "U.S. companies need to know who their counterparties are. Are they signing agreements with the Venezuelan government? Does that government have legitimacy?" This doubt regarding the legal framework of contracts and the legitimacy of the regime further exacerbates the risk-averse sentiment of capital. Energy Minister Chris Wright also acknowledged this reality at a Goldman Sachs conference in Miami, stating that U.S. oil giants will not invest billions of dollars in building new infrastructure in Venezuela next week. Although Chevron is currently the only company holding a U.S. license to export Venezuelan crude oil and is seeking to modify agreements to sell more oil, its CFO Eimear Bonner remained cautious during a closed-door meeting on Tuesday, not disclosing any recent expansion plans. Ambitions and Resistance in Reshaping the Global Energy Landscape The Trump administration's takeover of Venezuela's oil sector is seen as part of its global agenda. Bill Farren-Price of the Oxford Institute for Energy Studies pointed out that following actions against Iran and Nigeria, Venezuela is the third OPEC oil-producing country to be targeted by the U.S. in the past year. He believes this global agenda is attempting to reshape global energy trade on U.S. terms and conditions. However, this grand plan faces resistance from the business community at the execution level. Although the U.S. government has signaled that it will allow American oilfield service companies to operate in Venezuela and has begun to lift some sanctions that hinder the country's economy, industry executives believe that mere executive orders and political pressure are insufficient to offset actual business risks. For energy giants accustomed to long-term planning and stable returns, the current environment in Venezuela is still viewed as a "high-risk area." A private equity investor summarized, in an environment where a random social media post can change foreign policy, the instinctive reaction of capital is to avoid rather than to take risks.