Venezuela Oil Dispute: Analyzing Trump’s Claims of U.S. Resources Being Taken

U.S.-Venezuela Oil Relations Complicated by History of Nationalization

The recent comments by President Donald Trump about the United States “running” Venezuela and controlling its oil sales have brought attention to the complex history between the two nations’ energy sectors. Trump claimed that Venezuela “took our oil away from us” and “stole our assets” years ago, but energy experts and historians describe a more nuanced situation.

Venezuela’s path toward controlling its own energy resources began decades ago. In 1975, then-President Carlos Andrés Pérez signed legislation nationalizing the country’s oil industry, creating Petróleos de Venezuela S.A. (PDVSA) as the state-run company to oversee oil production. This move ended what The New York Times described as “more than half a century of dominance by foreign oil companies” in the country, including American firms like Exxon, Mobil, and Gulf Oil.

Before nationalization, these companies operated under concession contracts that allowed them to extract Venezuelan oil in exchange for royalties and taxes paid to the government. When nationalization took effect in 1976, approximately 20 foreign oil companies received about $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,” said Francisco Monaldi, director of the Latin America Energy Program at Rice University.

The situation evolved in the 1990s when Venezuela reopened its doors to foreign investment to boost production, particularly in the oil-rich Orinoco Belt region. However, the landscape changed dramatically in 2007 under President Hugo Chávez, who implemented a second nationalization plan requiring PDVSA to take a minimum 60% stake in all foreign oil projects.

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.” However, she emphasized that the seized assets belonged to private companies, not the U.S. government.

Some companies, including American-based Chevron, accepted these new terms and continued operations. “Chevron has been able to make money after they were partially expropriated,” noted Monaldi. However, two major U.S. companies – Exxon Mobil and ConocoPhillips – rejected Chávez’s demands and withdrew from the country, abandoning their projects and equipment.

Energy experts have consistently refuted Trump’s claim that the oil itself was “stolen” from America. Samantha Gross, director of energy security and climate initiatives at the Brookings Institution, told CBS News that “the oil itself was never ‘our oil.'” Venezuela has always maintained ownership of its reserves, which are the largest of any nation globally.

The U.S. companies that left Venezuela had to pursue compensation through international arbitration. 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 separately ordered Venezuela to pay $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 complicates future investment prospects. Despite Trump’s assertion that American oil companies will “spend billions of dollars” to repair Venezuela’s “badly broken infrastructure,” Exxon Mobil is cautious. Darren Woods, the company’s chairman and CEO, stated at a White House meeting that to reenter Venezuela a “third time would require some pretty significant changes” in the country’s legal and commercial frameworks, which he currently describes as “uninvestable.”

Energy experts agree that substantial improvements would be necessary to secure future foreign investment. Luisa Palacios of the Center on Global Energy Policy identified several prerequisites: improved governance, restored rule of law, and eased U.S. sanctions, including those imposed during Trump’s first administration.

For now, Secretary of State Marco Rubio has indicated that the U.S. will sell between 30 and 50 million barrels of Venezuelan oil that have already been produced and packaged. At market value, this could generate between $1.65 billion and $2.75 billion for the U.S. government, according to CNN.

Energy Secretary Chris Wright told CNBC that initial oil revenue would help “stabilize the economy in Venezuela,” while repaying U.S. oil companies remains a “longer term issue.” Industry analysts estimate it could take 15 years and investments exceeding $180 billion for Venezuela to return to its pre-Chávez production level of 3 million barrels per day.