Source: Fortune
Summary
Exxon Mobil and Chevron, two US oil giants, have announced that they will not increase their capital spending in Venezuela this year. Despite President Trump’s claims that US oil companies will invest over $100 billion in Venezuela, Exxon chairman and CEO Darren Woods stated that the country is currently “uninvestable” due to the need for major reforms and stability. Chevron, the only US company currently producing oil in Venezuela, also has no plans to add additional capital spending. Both companies reported quarterly earnings beats but are facing declining profits due to deflated crude oil prices.
Our Reading
The strategy enters a familiar phase.
Exxon and Chevron are taking a “wait and see” approach to Venezuela, citing the need for reforms and stability before investing. Exxon’s Darren Woods has drawn Trump’s ire for his candid assessment of Venezuela’s investment climate. Chevron’s Mike Wirth is also cautious, emphasizing the need for “value and capital discipline.” Both companies are focused on their existing operations and are not planning to increase spending in Venezuela. The situation is a classic example of corporate caution in the face of uncertainty.
The numbers tell one story, but the real story is about who gets to write the next chapter.
Author: Evan Null
