Despite US President Donald Trump's calls for big oil companies to invest billions into Venezuela, the Chief Executive Officer of TotalEnergies has called the move “too expensive and too polluting”, laying to rest speculations of the company re-entering the troubled nation.
The company had quit the country, “because it clashed with our strategy”, CEO Patrick Pouyanné was reported as saying by news agency Reuters. He said that it was too expensive and too polluting, and nothing has changed. “It is still the case.”
Trump has urged these energy giants to invest $100 billion in a bid to rebuild Venezuela's oil industry. He said that the companies will invest with the government's security assistance.
“The energy firms previously had problems because they did not have Trump as a President.” Trump was earlier quoted as saying.
Despite Trump's assurances and the fact that the country boasts of the world's largest oil reserves, some of the major oil firms in the US have expressed caution about rushing to re-enter Venezeula.
Exxon CEO Darren Woods was in the headlines recently for terming the Venezuelan market as “uninvestable” during a White House meeting with Trump. The President accused the oil giant of “playing cute” and threatened to sideline the company.
Bitter Experience
Infrastructure constraints are the single biggest reason these companies are wary of re-entering the Venezuelan market.
TotalEnergies commenced operations in the country in the 1990s but departed following a strategic shift away from heavy and high-sulfur crude. There were safety concerns as well.
Even previously, Pouyanné has said that Venezuela was not high on the firm's agenda.
Subject matter experts do not think differently as well. Amar Singh, global crude oil markets analyst at Barclays, told CNBC International that there were infrastructure constraints, “a lot of them.”
“Even before reaching that point of conversation, we first need to see what is going on with the regime change,” Singh said, “We need to see how quickly the country can transition to a democratic system.” He added that it was a long process despite the fact that there have been some reforms already.
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