What Did ExxonMobil's CEO Say to Trump to Block Energy Deal?

US President Donald Trump has threatened to block ExxonMobil from participating in Venezuela’s energy market, after its CEO Darren Woods shared contrasting opinions on the matter.

At a meeting in the White House alongside other oil executives on 9 January, Trump presented his plan for US companies to invest at least US$100bn to rebuild Venezuela’s oil industry.

ExxonMobil has a history of investing in challenging environments, including tropical regions and even the Arctic, but discussing the South American country, Darren said: “Today it's uninvestable.”

He added: “We have had our assets seized there twice and so you can imagine to re-enter a third time would require some pretty significant changes from what we’ve historically seen and what is currently the state.”

“I didn’t like Exxon’s response,” Trump told reporters on Air Force One, his private aircraft. “I’ll probably be inclined to keep Exxon out. I didn’t like their response.”

Nicolas Maduro ousted from Venezuela

Trump announced his plans to unleash the South American nation’s oil after US forces seized its leader Nicolas Maduro in a raid of the capital on 3 January.

The administration views US control over Venezuela’s oil as a key part of its strategy for the nation.

The highly reported round table six days later saw Trump gather leaders from a handful of companies, including Chevron and ConocoPhillips to encourage them to invest significant capital in Venezuela’s “rotting” energy infrastructure.

The President said: “One of the things the United States gets out of this will be even lower energy prices.”

Trump states that the US government would not provide financial investment but would offer the necessary “protection and security” for the companies to operate and recoup their investments.

He said that his administration would decide which firms would be allowed to operate, stating: “You’re dealing with us directly. You’re not dealing with Venezuela at all. We don’t want you to deal with Venezuela.”

Seizing value from Venezuela

On 9 January, Trump signed an executive order that seeks to prohibit US courts from seizing revenue that the US collects from Venezuelan oil and holds in American Treasury accounts.

The White House wrote in a fact sheet about the order: “President Trump is preventing the seizure of Venezuelan oil revenue that could undermine critical US efforts to ensure economic and political stability in Venezuela.”

According to the BBC, US-owned Chevron said it expects to increase its production, building on its current presence of a fifth of existing output. Exxon said it was working to send in a technical team to assess the situation.

Opposing opinions 

Darren was not alone in his caution towards Trump’s proposition. Harold Hamm, an Oklahoma oil tycoon and one of the President’s closest allies said: “It excited me as an explorationist. Everybody has that in their blood.”

But, he added, that the country has its “challenges”.

Analysts also agree that increasing production would take significant effort. David Goldwyn, President of energy consultancy Goldwyn Global Strategies and former US State Department Special Envoy for International Energy Affairs said: “They are being as polite as humanly possible, and being as supportive as they can, without committing actual dollars.”

He said that Exxon and Shell aren’t going to invest “single-digit billions of dollars, much less tens of billions of dollars" without a competitive fiscal framework or physical security.

Whilst the verdict remains unclear about which oil execs will be joining Trump in his Venezuelan goals, the President is committed to the proposal and having control over who can get on board.