Western oil companies have been fighting to recoup tens of billions of dollars that they say Venezuela owes them — debts that could greatly complicate efforts by President Trump to compel U.S. businesses to produce more oil in the country.
Exxon Mobil and ConocoPhillips top the list of oil companies with big financial claims against Venezuela, whose president, Nicolás Maduro, was captured by U.S. forces over the weekend in Caracas.
American and European oil companies once had significant operations in Venezuela, ranked as having the world’s largest proven oil reserves. But most Western energy businesses abandoned the country after disputes with its leftist government, and since then corruption, mismanagement and neglect have greatly eroded oil production.
The foreign oil companies have been fighting for two decades to be compensated for being forced out of the country under Mr. Maduro’s predecessor, Hugo Chávez. Oil executives and experts have said that until those debts are resolved these companies will be very reluctant to invest more in the country — something Mr. Trump has made one of his key aims for reviving the Venezuela’s economy.
In the mid-2000s, the Chávez government demanded that oil companies accept a smaller stake in Venezuelan projects without compensation. Most foreign companies left the country rather than accept the new terms.
ConocoPhillips’s claims against Venezuela add up to $12 billion, while Exxon Mobil, the largest U.S. oil company, has said the country owes it an estimated $20 billion.
Chevron is the only U.S. oil company that stayed in Venezuela. That gambit has put it in a potential position to reap a significant reward as the Trump administration presses the country to accept greater U.S. investment.
Exxon Mobil, ConocoPhillips and other companies have spent years trying to make Venezuela pay through international arbitration and cases in U.S. courts.
“It’s a stigmatizing action against a country,” Shon Hiatt, director of the Zage Business of Energy Initiative at the Marshall School of Business at the University of Southern California. “It’s basically telling everybody that they’re never going back in to the country.”
European energy companies, including Italy’s Eni, France’s TotalEnergies and Spain’s Repsol, also invested billions of dollars in Venezuela though their operations were much smaller than those of Exxon Mobil and ConocoPhillips, said Mr. Hiatt, who has long tracked the oil industry in Venezuela.
While oil companies have categorized those debts as unlikely to be repaid, they are highly unlikely to give up on their claims.
ConocoPhillips may end up recouping some of its losses as part of a U.S. Bankruptcy Court’s auction of Citgo, an American subsidiary of Venezuela’s state-owned oil company, Petróleos de Venezuela.
ConocoPhillips declined to comment beyond what it has said in regulatory filings.
The company had substantial investments in oil projects in central and eastern Venezuela as well as off the country’s coast. International arbitration bodies have repeatedly ruled in Conoco’s favor, but turning those decisions into cash has been very difficult.
Exxon Mobil has said in regulatory filings that it collected awards of $908 million related to its investment in the Cerro Negro Project in eastern Venezuela, and $260 million in compensation related to the La Ceiba Project on a port in the nation’s central region.
But another $1.4 billion arbitration award was annulled in the International Center for Settlement of Investment Disputes. Exxon filed a new claim to restore the award, but that and the large majority of Exxon’s claims have gone unpaid.
Exxon Mobil did not respond to requests for comment.
Venezuela has contested many foreign oil company claims, and said it owes much less or nothing at all.
U.S. and European oil companies have been speaking with the Trump administration about their next steps in Venezuela. But new investments pose significant challenges because of the political instability created by Mr. Maduro’s capture.
Mr. Trump said on Saturday the U.S. oil companies would “spend billions of dollars, fix the badly broken infrastructure” and “start making money for the country.”
An Energy Department spokesman said that Chris Wright, the energy secretary, “remains in close contact with U.S. oil companies and plans to meet with several of them” at a conference on Wednesday.
But investors remain wary. Exxon Mobil’s stock price fell more than 3 percent on Tuesday. ConocoPhillips fell more than 1 percent, and Chevron’s share price dropped more than 4 percent after significant gains on Monday.
Even before the Trump administration seized Mr. Maduro, the cost of restoring Venezuela’s oil production would have been substantial.
The Inter-American Development Bank, the primary source of development financing in South America and the Caribbean, estimated in 2020 that it would cost $10 billion a year over a decade to restore Venezuela’s oil production.
The Center for Energy Studies at the Rice University’s Baker Institute for Public Policy estimated that Venezuela’s production peaked in 1998 at 3.4 million barrels of oil a day and dropped to 1.3 million barrels a day by 2018.
In a 2020 report the center noted that the failure to attract more investment into its oil industry has been “one of the key drivers of the economic catastrophe facing the country.”
Ivan Penn is a reporter based in Los Angeles and covers the energy industry. His work has included reporting on clean energy, failures in the electric grid and the economics of utility services.
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