Exxon CEO Woods Says Venezuela Must Change Fiscal and Legal Rules Before Exxon Commits Capital, as Chevron Plans $7 Billion

Since Darren Woods called Venezuela "uninvestible" at the White House in January, after U.S. forces ousted Nicolás Maduro, much of the oil industry has moved ahead without ExxonMobil. On the company's third-quarter earnings call on Friday, Oct. 30, Woods said his position has not changed.

"I think sometimes there's maybe a little more exuberance than is warranted," Woods said.

Exxon's conditions

Woods said Exxon will not commit capital until fiscal, legal and investor-protection changes are in place. "It's going to require some substantial changes to the way things have historically been done in Venezuela," he said. "There is progress being made on those areas... but there's a way to go."

He wants a project that is "sustainable" and generates returns "required to compete in our portfolio." He named cost competitiveness, scale and technical expertise as hurdles that few companies can clear.

"I expect that to take time," Woods said. "We're not in a rush. We think that opportunity is going to be there for a while."

He also told listeners to take press reports about Exxon and Venezuela "with a little pinch of salt." That was a reference to reports a month ago that Exxon was close to signing a memorandum of understanding to explore Venezuelan oilfields. Woods said Exxon "ultimately will have a role." He gave no investment figure and no date.

Exxon's caution has a history behind it. Venezuela nationalized the company's assets twice, most recently in 2007.

What rivals have signed

Chevron never fully left Venezuela and remains the top private producer there. Its plan, announced Sept. 2, has its three joint ventures investing more than $7 billion over five years. The target is roughly 600,000 barrels a day, more than double the ventures' 2026 output. The agreements also added acreage in the Orinoco Belt and updated fiscal, commercial and legal terms.

Chevron CEO Mike Wirth said on his own earnings call Oct. 30 that the new fiscal terms make Venezuela more competitive. He said the contract's stability clauses and international arbitration provisions are "as good as we see anywhere in the world." The program will be self-funded from venture revenue, Wirth said, so Chevron will not be "exposing additional capital investments."

The European majors have signed too. Eni, Repsol, BP and Shell have all reached agreements with the Venezuelan government, according to BNamericas. Shell CEO Wael Sawan said Oct. 29 that heavy oil is not an obvious fit for the company. Shell is looking at offshore gas that could connect to its Trinidad and Tobago infrastructure through Atlantic LNG.

Continental Resources, founded by Trump ally Harold Hamm, signed a memorandum of understanding with state oil company PDVSA last month to develop an area of the Orinoco Belt.

Washington's role

The White House is not a neutral party here. After Woods' January remark, Trump said of Exxon: "I didn't like their response. They're playing too cute."

In late August, Trump announced what he called the "biggest oil deal in world history." By his account, the U.S. would control more than 65 billion barrels of proven reserves across 17 Venezuelan oilfields. The arrangement would run through North American Blue Energy Partners, the country's second-largest private oil producer, with the Defense Department holding a 35% stake. Many details remain unpublished.

Woods has said the January comment described conditions at that moment, not a permanent judgment. Chevron's position is that the new terms already meet its bar. The two companies are reading the same country differently, and each has its own history to explain why.

The quarter behind the comments

The Venezuela remarks came on a call where Exxon reported third-quarter earnings per share of $4.23 against a consensus estimate of $4.12, per MarketBeat. Revenue was $110.50 billion against an estimate of $104.89 billion. Woods tied the strong market to Middle East conflict that has constrained supplies of crude, diesel and gasoline. Exxon said it has invested more than $200 billion over the past decade.

Exxon is not short of other places to put money. Venezuela is a choice, not a necessity, and Woods framed it that way.

What comes next

Exxon's entry now depends on rule changes Woods says are "in progress" but unfinished. Venezuela's fiscal regime, legal framework and investor protections would all have to be in place first, and Exxon has set no date for a decision. Chevron's 600,000-barrel-a-day target runs through 2031, which gives a rough measure of how long the rest of the industry expects the buildout to take.