Subject: ExxonMobil Position on Venezuela
XOM has released their prepared remarks to Trump on investing in Venezuela. In carefully crafted words, Darren Woods said that Venezuela is "uninvestable" under current conditions, and that many changes would be needed for XOM to consider investing there. He threw out some bouquets, always necessary in dealing with Trump - i.e. that he is confident that the US could achieve these changes over time. But he basically said XOM is not interested in playing in the current game.

https://corporate.exxonmobil.c...

For background, Paul Krugman recently published a good review of the real situation in Venezuela re oil. Among other revelations, he points out that Venezuela doesn't really have 300 billion barrels of oil reserves. The current government just raised the prior, more realistic, estimate of 100 billion barrels by declaring that all of the Orinoco deposits were economically recoverable under then current technology and prices. That is pure BS. The oil is very heavy, very expensive to produce, and has many contaminates that must be removed before refining. Kruger covers all of this. Worth a read.

https://paulkrugman.substack.c...

How much investment it would take to make Venezuelan oil competitive in not defined. The $100 billion is another figure pulled out of thin air. XOM did offer to send a team of experts into Venezuela to define what would be really needed provided their security could be ensured. XOM has the best major project management organization in the O&G business, so this would be a necessary first step.

Oil supplies over the long range is an important macro economic subject. The IEA has recently updated its future demand outlook under several scenarios. Unlike last year, this time they did include a scenario under current policies. Their resulting outlook was slightly higher than XOM's planning base, showing continued modest growth in oil demand. Does anyone still think the world will prioritize reducing greenhouse gas emissions over economic growth? The IEA also recognized that Africa needs clean fuels for cooking for humanitarian reasons - a point XOM has been making for years.

Since current oil fields decline about 8% a year on average due to depletion, there will be a continuing demand to find new reserves over time. Shale oil declines much faster. Perhaps at some future date, oil from Venezuela could be important as a supply source.

But right now, it's a political sideshow with a loud barker trying to divert attention from real macro economic issues in the USA.