Trump’s Venezuela Oil Claims: A Closer Look at the Historical Context

President Donald Trump’s recent assertion that Venezuela “took our oil away from us” and “stole our assets” represents a significant oversimplification of the complex history of Venezuela’s energy sector nationalization process.

The roots of this situation stretch back to 1975, when Venezuela first nationalized its oil industry under President Carlos Andrés Pérez. This move created the state-run company Petróleos de Venezuela S.A. (PDVSA) and ended “more than half a century of dominance by foreign oil companies” in the country, including American firms like Exxon, Mobil and Gulf Oil.

Francisco Monaldi, director of the Latin America Energy Program at Rice University, noted that prior to nationalization, foreign companies operated under contracts that “basically authorized them to produce oil and pay royalties and taxes to the Venezuelan government.” These arrangements were set to expire in 1983, and the transition was largely amicable. Around 20 foreign oil companies received approximately $1 billion in compensation, with some negotiating contracts to continue providing technical and marketing support.

“The arrangement was not controversial at all with the oil companies,” Monaldi explained.

During the 1990s, Venezuela reopened its doors to foreign oil companies specifically to boost production, particularly in the oil-rich Orinoco Belt region. However, the situation changed dramatically in 2007 under then-President Hugo Chávez, when his administration required foreign companies to enter into new contracts giving PDVSA a minimum 60% stake in their oil projects.

Several major oil companies, including U.S.-based Chevron, accepted these terms and continued operations in Venezuela. “Chevron has been able to make money after they were partially expropriated,” Monaldi noted. However, Exxon Mobil and ConocoPhillips rejected the conditions and withdrew from the country, abandoning their projects and equipment.

Experts emphasize that the oil reserves themselves were never American property. Samantha Gross, director of energy security and climate initiative at the Brookings Institution, told CBS News, “The oil itself was never ‘our oil,'” clarifying that Venezuela has always maintained ownership of its oil reserves, which are the largest of any nation.

Roxanna Vigil, an international affairs fellow at the Council on Foreign Relations, explained, “They did change the terms of the deals that they had with the companies that were operating in Venezuela,” but pointed out that the assets belonged to private companies, not the U.S. government.

Both Exxon Mobil and ConocoPhillips pursued international arbitration to secure compensation for their expropriated assets. The International Chamber of Commerce awarded $908 million to Exxon Mobil in 2012 and $2 billion to ConocoPhillips in 2018. The World Bank’s International Centre for Settlement of Investment Disputes ordered additional payments of $1.6 billion to Exxon Mobil in 2014 and $8.7 billion to ConocoPhillips in 2019. However, both companies report receiving only a fraction of what they’re owed.

This history now influences current investment considerations. At a recent White House meeting with oil executives, Exxon Mobil CEO Darren Woods expressed reluctance about reentering Venezuela, saying that under current conditions, “it’s uninvestable.”

Energy experts agree that significant improvements would be necessary to secure future investments. Luisa Palacios of the Center on Global Energy Policy noted that foreign companies seek “improvement in governance, restoration of the rule of law, and an easing of US oil sanctions,” including those imposed during Trump’s first administration.

Secretary of State Marco Rubio has indicated that the U.S. will take between 30 and 50 million barrels of already-produced Venezuelan oil and “sell it in the marketplace,” potentially generating $1.65 to $2.75 billion. Energy Secretary Chris Wright told CNBC these funds would first help “stabilize the economy in Venezuela,” with repayment to U.S. oil companies being a “longer term issue.”

Jorge León of Rystad Energy estimates it would take 15 years and over $180 billion in investments for Venezuela to return to its pre-Chavez production rate of 3 million barrels per day, compared to its current output of approximately 860,000 barrels daily.