HOUSTON, (Reuters) – ExxonMobil said yesterday it signed a memorandum of understanding with Venezuelan state oil company PDVSA to assess upstream oil opportunities, marking a potential return to the country nearly two decades after its assets were expropriated.
The agreement is non-binding and does not commit Exxon to any specific project.
“This memorandum is a meaningful first step, but any future investment would require stable policies, clear regulations, strong investment protections and competitive returns,” Exxon said in a statement.
The company did not say which projects or oil areas it was evaluating. A final joint-venture or production-sharing contract would be needed before Exxon could take part in exploration or production.
If Exxon proceeds, it would mark a major return to Venezuela after former President Hugo Chavez’s government expropriated its assets. It would also be a political win for US President Donald Trump, who has sought to remake Venezuela’s oil sector with US companies in leading roles after American forces removed President Nicolas Maduro from power in January.
At a signing ceremony broadcast by VTV, a state TV station, interim President Delcy Rodriguez welcomed Exxon back and said she hoped the memorandum would soon lead to concrete agreements.
“We welcome you back,” Rodriguez said, adding that Venezuela expected the partnership to bring benefits both to Exxon and to the Venezuelan people. She also said Exxon would invest under favourable conditions and within a framework of legal certainty to protect its operations.
Before the expropriation, Exxon held a 41.67% stake in the Cerro Negro heavy crude project, now known as Petromonagas, as well as a 50% interest in the La Ceiba project in the southern Maracaibo basin.
Exxon affiliates filed for arbitration against Venezuela at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in 2007. In 2014, ICSID awarded Exxon $1.6 billion plus interest. Venezuela has challenged the award and the dispute remains unresolved.
Earlier this year, after oil reforms advanced by Rodriguez opened the sector to new entrants, Exxon CEO Darren Woods said progress had been made on fiscal and legal terms, but cautioned that the company was “not in a rush.”
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