Exxon Mobil and Chevron posted their lowest annual profits since 2021 in their earnings reports Friday — even more reason to suggest neither of those companies is champing at the bit to invest big in Venezuela at the moment.

In fact, it’s not really a time when big oil is looking to make any kind of investments in new oil production.

Tom Seng, assistant professor of energy finance at Texas Christian University, said that’s in part because the market is in a low-price environment.

“The market globally is deemed to be in an oversupply situation,” Seng said. “Why in the world would they invest in a place like Venezuela?”

Some of the road blocks to big investments there aren’t specific to Venezuela. Seng said since oil prices went negative during the pandemic, energy companies shifted gears toward discipline.

“No more drill, baby drill — get into debt by just continually drilling and drilling, instead focus on free cash flows, which allowed companies to pay down debt, to pay dividends consistently,” Seng said.

There’s more corporate discipline, low oil prices, an oversupplied oil market, and uncertainty around demand. That’s not exactly the makings of a “let’s take on a big investment risk” moment, said Thomas Liles, senior vice president at Rystad Energy.

“Investment is likely to remain fairly conservative, flattish, and in a sense, albeit with the ability to pick low-hanging fruit, where needed,” he said.

So companies are investing in places where there’s already massive operations, like in west Texas or Guyana.

As for the outlook in Venezuela, specifically, a lot needs to happen to make the country investable in a big way, said Andy O’Conor, senior vice president at Morningstar DBRS.

“In Venezuela, the challenge is developing abundant resources, not finding them,” O’Conor said. “This requires a higher oil price. And then, additionally, most potential investors will need a significant change in the country’s legal and commercial frameworks before they consider investing.”

Ed Hirs, an energy economist at the University of Houston, put it a different way.

“Until they see a Trump hotel on the beach in Caracas, no oil company is going down to Venezuela with billions of dollars,” Hirs said.

Even Chevron, which is already operating in Venezuela, is cautious.

While it may increase its Venezuelan production in the near term with modest investments, there’s still a ceiling on major growth for now. 

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