WSJ Piece: Trump’s Hint to Oil Executives Weeks Before Maduro Ouster: ‘Get Ready’

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President Trump had a vague but tantalizing message for a couple of American oil executives roughly a month before the U.S. captured Venezuelan strongman Nicolás Maduro: “Get ready.”

Big changes were coming to Venezuela, Trump hinted.

Although Trump gave the executives a hint, he didn’t provide them with specific details of the strikes on Venezuela’s capital, Caracas, that unfolded early Saturday, according to people familiar with the matter. Nor did he seek their advice on a plan unveiled the same day to have U.S. energy companies revitalize Venezuela’s dilapidated oil fields with multibillion-dollar investments.

But Trump’s hint last month reveals how central oil is to his daring—and risk-filled—decision to go into Venezuela as well as his close ties to the industry. Trump’s plan will hinge in large part on U.S. oil companies’ willingness to invest in Venezuela, especially Chevron, the only major U.S. company still operating there.

“We are going to be taking a tremendous amount of wealth out of the ground,” Trump said at a press conference at Mar-a-Lago Saturday. “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.”

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Meanwhile, a senior White House official said that Energy Secretary Chris Wright and Secretary of State Marco Rubio are leading that effort on Trump’s behalf, and that correspondence with oil companies has already begun.

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For now, Chevron has no plans to increase spending or boost production significantly, people familiar with the matter said. The Houston oil giant is wary of committing new capital there until the country is more stable and questions around commercial agreements get resolved. It has also never advocated for regime change in Venezuela with the administration, they said.

“Chevron remains focused on the safety and well-being of our employees, as well as the integrity of our assets,” a Chevron spokesman said. “We continue to operate in full compliance with all relevant laws and regulations.”

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Venezuela’s government estimates that the country has about 300 billion barrels of oil in reserves, which, if true, would make it the largest oil bounty on the planet. The country’s current output comes to roughly 900,000 barrels a day, less than 1% of the world’s daily consumption of oil.

Boosting that production would improve economic conditions in the country, which the Trump administration hopes will stem the flow of migrants from Venezuela to the U.S. and keep energy prices low for consumers. But the largest U.S. oil companies best positioned to plow money into Venezuela haven’t committed to the venture thus far.

Two other U.S. oil companies with the scale and expertise in heavy oil to invest in the Latin American country—ConocoPhillips and Exxon—haven’t signaled any plans to re-enter the country that nationalized their assets there in the mid-2000s. ConocoPhillips has said it is premature to speculate on new investments. Exxon didn’t respond to requests for comment.

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“If you’re going into Venezuela, you’ve got to have terms that you think are going to protect you from the Venezuelans and, frankly, protect you from a different administration in the U.S.,” he said of the companies.

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Among the issues Chevron and other oil companies must consider: who is in charge in Venezuela, what policies will govern contracts, whether the rule of law will protect the sanctity of those contracts, the ability to export crude, and the costs of fixing infrastructure. Even if oil companies decide to invest, it could take years for Venezuela’s oil production to substantially increase.

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Any large capital investment Chevron makes in the country would have to compete, in terms of its potential for investment returns, with other opportunities in its global portfolio, these people said. Those opportunities include a generational oil discovery in Guyana, where it acquired a 30% stake when it bought Hess last year. It is planning to spend $7 billion on offshore drilling projects this year in places like the Eastern Mediterranean and the Gulf of Mexico, which the Trump administration is calling the Gulf of America.

A White House official said the administration has had conversations with multiple oil companies.

“All of our oil companies are ready and willing to make big investments in Venezuela that will rebuild their oil infrastructure, which was destroyed by the illegitimate Maduro regime,” said Taylor Rogers, a White House spokeswoman. “American oil companies will do an incredible job for the people of Venezuela and will represent the United States well.”

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