3 articles · Updated · The New York Times · Nov 10
Summary
Exxon Mobil said Monday it reached a nonbinding preliminary agreement with Venezuela that gives it time to evaluate oil production opportunities, moving the U.S. major closer to re-entering the country.
The memorandum of understanding follows Venezuela's legal overhaul to attract foreign investors and a sharp market shift since January, when CEO Darren Woods called the country "uninvestable."
Oil prices have risen about 50% since January, largely because of the war with Iran, increasing the appeal of output from Venezuela, which sits far from chokepoints such as the Strait of Hormuz.
Exxon said any future investment still depends on stable policies, clear regulations, investment protections and competitive returns after it left Venezuela in 2007 when the government changed foreign operating terms.
The thaw also matters beyond Venezuela itself: Exxon is expanding rapidly in neighboring Guyana, where a territorial dispute with Caracas could shape future maritime border talks expected after a UN court ruling, likely by early next year.
After abandoning Venezuela in 2007, what secret assurances finally convinced Exxon Mobil to risk returning to a nation plagued by legal uncertainty?
Is Exxon’s sudden return to Venezuela truly about untapped oil, or a calculated geopolitical maneuver to protect its massive Guyana empire?
With Venezuela's infrastructure in ruins, can this preliminary agreement actually transform the world's largest untapped oil reserves into flowing crude?