- Ali Moshiri, chief executive of Amos Global Energy and previously head of Chevron Latin American operations until 2017, has assembled $2 billion from roughly 15 investors to put into Venezuelan oil production and infrastructure. He says state-owned PDVSA is moving at a glacial pace on his proposals and that there is no process and no urgency.
- His team has signed a memorandum of understanding covering one of seven fields he is pursuing. Together those assets could produce around 200,000 barrels a day, which he puts at roughly 20% of current national output, implying Venezuela is producing close to one million barrels a day.
- Moshiri is also seeking a contract to rebuild the Jose Antonio Anzoategui complex, Venezuela main Caribbean oil export port, which he says runs at only 40% capacity. He would spend up to $1 billion on repairs and says he has $500 million available immediately.
- Chevron is now the country leading private-sector producer and is investing $7 billion to double its Venezuelan output over five years. ExxonMobil and ConocoPhillips both left in 2007 when Hugo Chavez seized control of Orinoco Belt projects, and ExxonMobil is now in talks to return.
What Happened?
Moshiri has been negotiating with the Venezuelan government since before US forces captured former President Nicolas Maduro in January. He travels to Caracas this weekend seeking a face-to-face meeting with PDVSA executives and intends to meet acting President Delcy Rodriguez. PDVSA and the Venezuelan oil and information ministries did not immediately respond to requests for comment. He credited the Trump administration with stabilising the country enough to give foreign corporations confidence to return, but called the current push for US companies to sign contracts overly opportunistic and too focused on short-term gains rather than a long-term recovery plan, comparing the rebuild to raising the Titanic. He also questioned whether North American Blue Energy Partners, which is partnering with the US government to produce crude there, can lift output at the 17 complicated fields it holds, saying the company has no operational experience. That company did not immediately respond to a request for comment.
Why It Matters?
The man who kept Chevron in Venezuela through the 2007 expropriations, when ExxonMobil and ConocoPhillips walked away, is the one now unable to get a meeting, while fields have gone to an operator he says has never run anything. That allocation pattern is the warning. If access is being distributed politically rather than competitively, the reopening reproduces the conditions that destroyed foreign investment there in the first place, and Moshiri says as much when he argues that any award which is not competitive will be challenged in future. His contractual preference carries the same message in more precise terms. He refuses production-sharing agreements, the structure other producers have accepted, because Venezuela can terminate them, and insists instead on a joint venture with PDVSA approved by lawmakers. That is a direct statement that the deals currently being signed are legally fragile, and anyone underwriting Venezuelan exposure through those counterparties should price that. The port figure is the constraint that receives the least attention and may matter most. A main export terminal operating at 40% caps what the country can physically ship regardless of how much it produces, so production agreements signed now may not translate into exportable barrels. For oil markets more broadly, roughly one million barrels a day of current output with meaningful upside is a material supply variable at a moment when Iran-related disruption has crude above $100.
What Next?
Moshiri Caracas trip this weekend is the immediate test, and whether he secures meetings with PDVSA executives and Rodriguez will indicate if the freeze-out is deliberate policy or bureaucratic drift. Watch whether his memorandum of understanding on one field converts into a binding agreement, and on what contractual structure, since a joint venture with legislative approval would set a precedent materially stronger than the production-sharing deals signed to date. Track any award of the port renovation contract, because export capacity determines whether production gains reach the market. North American Blue Energy Partners performance at its 17 fields is the measurable test of Moshiri criticism, and production data from those assets over the coming quarters will settle it. For investors, Chevron $7 billion programme is the cleanest listed exposure to the reopening, and ExxonMobil returning would signal that the majors judge the legal framework durable enough to re-enter a country they left nearly two decades ago.
Affected Tickers and Coins: CVX, XOM, COP
Source: Bloomberg
