Let's talk about oil companies knowing something Trump doesn't about Venezuela.... - Belle of the Ranch

[TexasTowelie]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about oil companies knowing something Trump doesn't about Venezuela.

Ever since Trump's operation down there, he's been insisting the oil companies are going to drop a hundred billion dollars investing in Venezuela. He was noticeably upset when an oil executive told him the country is uninvestable. That leads us to this question.

Belle, why are the oil companies so reluctant to go into Venezuela? It's like they know something Trump doesn't. What's the risk now that Maduro is out? It seems like they're not upping their investments.

It's like they know something Trump doesn't. They do. The oil business and let's be real, the companies I'm pretty sure you're talking about have forgotten so much more about operating in less than permissive countries than Trump has ever known. These are companies that routinely navigate in incredibly unstable parts of the world.

Given the timing of this question, I have to assume it's largely based on recent statements from the bosses of Exxon and Chevron. Both seem to indicate there were no plans for significant capital investment in Venezuela this year. Chevron chairman and CEO Mike Wirth recently said on an earnings call, "You should expect us to remain focused on value and capital discipline. It's a large resource that has the opportunity to become a more sizable part of our portfolio in the future, but we also need to see stability in the country."

That's executive speak for we're not sending dump trucks of cash over a rickety bridge. Keep in mind Chevron already has a presence down there.

Meanwhile, the CEO of Exxon indicated he still sees the country as uninvestable and said, "Those priorities start with one, stabilizing the country. Second is to kickstart the economy and try to recover some of the damage that's been done over the decades of abuse that the dictators brought in, and then ultimately to transition into representative government.

What do oil companies know that Trump doesn't seem to? I think one of the big ones is that it's called regime change, not head of state change. The forces that controlled the country still control the country and to be clear, I'm not saying there needs to be regime change. I honestly don't think the oil companies are either. They seem pretty content to let things take a slow course on their own. But Trump snatching the head of state didn't actually shift the government much.

The oil companies might believe that the reduced risk for them only stays reduced as long as there's a carrier off the coast of Venezuela. That's not a great investment environment. And it's also not an environment they can count on existing long enough to get a return on their investment. I mean, let's be real. Trump couldn't pull off a smooth regime change at a performing arts center. He's probably not going to be great at the country level either.

Anyway, it's just a thought. Y'all have a good day.

[applegrove]

1. I love this quote from the post:

Trump couldn't pull off a smooth regime change at a performing arts center. He's probably not going to be great at the country level either.