Exxon moves toward return to Venezuela

Oil giant ExxonMobil has taken a major step toward returning to Venezuela to produce oil.

The firm has signed a memorandum of understanding with the South American nation to evaluate opportunities for drilling there.

“We welcome the opportunity to evaluate potential upstream opportunities with the Venezuelan government and PDVSA,” said a spokesperson for the firm, referring to Venezuela’s state-run oil company Petróleos de Venezuela.

“This memorandum is a meaningful first step, but any future investment would require stable policies, clear regulations, strong investment protections and competitive returns,” the spokesperson added, not providing any additional details.

While the memo appears to stop short of a full commitment, it comes after Exxon CEO Darren Woods called Venezuela “uninvestable” under current conditions earlier this year.

President Trump, meanwhile, has sought to push U.S. companies to invest in the Latin American nation’s oil after the U.S. invasion at the start of the year.

“We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” he said in January after capturing the nation’s leader, Nicolás Maduro.

Around that time, the Trump administration indicated it would be in control of Venezuela’s oil, with Energy Secretary Chris Wright saying the U.S. would sell the petroleum “indefinitely.”

Since that time, the U.S. has struck up its own Venezuelan oil partnership with private operator North American Blue Energy Partners.

Exxon left Venezuela in 2007 amid a nationalization push by then-President Hugo Chávez.

Chevron remained in Venezuela and recently announced plans to double its production there.

Venezuela is estimated to have massive quantities of oil under its surface .

Trump’s war in Iran, meanwhile, has driven up global oil prices by constraining supplies out of the Middle East, raising gasoline prices along with it.

As of Tuesday, the average U.S. gas price was about $3.98 per gallon according to AAA , dropping below $4 for the first time in months , but it still is about 91 cents higher than at this time last year.

While oil prices have fallen in recent days, new investments in Venezuela are unlikely to immediately move the needle on oil or gasoline prices because it could take significant time to get any additional production underway.