"Venezuela is supposed to be the amazing future of big oil. After all, about one-fifth of the world's proven oil reserves sit in and under land and water it controls. These are vast new fields for Exxon Mobil Corp. ( NYSE: XOM) and Chevron Corp. ( NYSE: CVX). Not so fast. As the United States seized Venezuelan dictator Nicolás Maduro, word went out that President Trump will gather oil executives at the White House."
"Exxon faces huge hurdles that do not appear to be baked in to the stock price. First, the ongoing takeover of Venezuela could be messy. It is unclear who will fight to control the government. Certainly, the U.S. will be in the battle. Yet, there is no good guess about how long that conflict will go on. It is not easy to control a country with 30 million residents spread over 350 million square miles, much of it mountainous."
Venezuela holds about one-fifth of the world's proven oil reserves, offering potential large-scale opportunities for companies like Exxon and Chevron. U.S. moves against Nicolás Maduro and engagement with oil executives suggest possible American-backed transfers of facilities and control. Significant obstacles include a potentially violent and prolonged takeover, the logistical difficulty of governing a large mountainous nation, and severe infrastructure neglect that has reduced exports dramatically. Distinguishing the impacts of sanctions from disrepair is challenging. Restoring production and developing new fields will require years and billions of dollars, delaying meaningful returns.
Read at 24/7 Wall St.
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