quote:
LONDON, Jan 12 (Reuters) - Global oil trading houses have emerged as early winners in the race to control Venezuelan crude flows, getting ahead of U.S. energy majors wary of credit and legal risks and securing a potentially lucrative business opportunity in the country with the world's largest crude reserves.

U.S. President Donald Trump said U.S. majors would invest billions of dollars in Venezuela to quickly rebuild its dilapidated oil sector following the U.S. capture of President Nicolas Maduro earlier in January. Trump met top oil executives at the White House on Friday as his administration outlines a long-term plan to raise $100 billion to boost Venezuelan oil output.

The first companies to secure any business in the wake of the U.S. military action in Caracas, however, were Dutch-based trader Vitol and Singapore-headquartered peer Trafigura, rather than U.S. majors.

quote:
The traders also won the Venezuelan oil export deals because they have a higher risk tolerance and are more nimble than major publicly traded oil companies, said three participants at the White House meetings.

Legal teams and advisors have discouraged some big U.S. oil producers from getting involved in ?the initial oil shipments due to the potential for Venezuelan creditors to seize the revenue, one of the sources said.

"How can it be guaranteed that creditors will not resort to legal action in the U.S. or elsewhere?," said one advisor to a U.S. oil company on Venezuelan affairs.

The U.S. government told the trading companies it would provide protection by controlling the bank accounts linked to the sales and shielding proceeds from creditors, three sources familiar with the matter said.

Trump moved quickly on Friday to do that. He issued an executive order blocking courts and creditors from impounding revenue from the sale of Venezuelan oil held in U.S. Treasury-controlled accounts, the White House said on Saturday.

Venezuela owes more than $150 billion in foreign debt. Among creditors are the same oil companies that Trump wants to help rebuild Venezuela's industry. ConocoPhillips ( COP ) and Exxon Mobil ( XOM ) are still trying to recover almost $14 billion related to asset expropriations 20 years ago.

REUTERS

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Posted by JL

Member since Aug 2006

3224 posts

Posted on 1/12/26 at 7:56 am to bigjoe1

That's expected. They aren't E&P companies, don't have hard assets in country, low risk to make these deals. Just coming in and saying you are willing to trade the oil is much easier than committing to drilling wells, building and repairing platforms, laying/reparing pipeline.

This post was edited on 1/12/26 at 7:59 am

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