The nonbinding memorandum with PDVSA commits the company to no project; the Trump administration calls it a sign that its Venezuela policy is drawing investment, while Exxon says any spending depends on stable rules and investor protections.
ExxonMobil, which left Venezuela in 2007 after the government of Hugo Chávez took over its oil projects, signed a memorandum of understanding on Monday with the country’s government and its state oil company, Petróleos de Venezuela, or PDVSA, to evaluate oil production opportunities there.
The agreement is not binding and does not commit the company to any project, Quartz reported, citing Reuters. Exxon did not name the fields under review and would need a definitive joint-venture or production-sharing contract before drilling or producing anything.
“This memorandum is a meaningful first step, but any future investment would require stable policies, clear regulations, strong investment protections and competitive returns,” the company said in a statement.
The administration’s case
For the Trump administration, the signing is evidence that its approach to Venezuela since U.S. forces captured Nicolás Maduro in January is working. The administration said then that it wanted American oil companies to invest billions of dollars to rebuild Venezuela’s oil industry.
“ExxonMobil’s preliminary agreement to return to Venezuela is a testament to President Trump’s leadership,” Energy Secretary Chris Wright wrote on X on Tuesday, according to the Washington Examiner. “A country deemed ‘uninvestable’ earlier this year is already attracting significant commitment from one of the world’s largest energy companies. Tremendous progress in a remarkably short time.”
The legal framework runs through the Treasury Department. Venezuela and PDVSA remain under U.S. sanctions, but the Office of Foreign Assets Control has issued general licenses permitting specific business. The current version, General License 52C, dated Sept. 14, authorizes U.S. companies that existed before Jan. 29, 2025, to do business with PDVSA and its majority-owned affiliates, on conditions.
Contracts must send disputes to courts or arbitration in the United States, Britain, France or Singapore. Payments to blocked parties, other than local taxes and fees, must go into Treasury-designated Foreign Government Deposit Funds specified in a Jan. 9 executive order. The license excludes dealings in Venezuelan debt, any transaction involving Russian, Iranian, North Korean or Cuban parties or Chinese-controlled entities, and any change to the governance of PDVSA’s U.S. refiner, Citgo.
The administration has described its role in handling the oil revenue as that of a custodian. According to a KPMG report cited by The New York Times, a Treasury-managed account received $12.26 billion from Venezuelan oil exports between January and September, most of which was sent back to Venezuela soon after it arrived.
A long history, and an unpaid award
Before the 2007 takeover, Exxon held 41.67 percent of the Cerro Negro heavy-oil project, now known as Petromonagas, and half of the La Ceiba project, according to Reuters. Exxon affiliates took Venezuela to arbitration at the World Bank’s International Centre for Settlement of Investment Disputes, which in 2014 awarded the company $1.6 billion plus interest. Venezuela has contested the award, and the matter remains unresolved.
That history shaped the caution of Exxon’s chief executive, Darren Woods. At a White House meeting in January, he called Venezuela “uninvestable.” “We’ve had our assets seized there twice, and so you can imagine to re-enter a third time would require some pretty significant changes,” he said at the time. By October, Mr. Woods told analysts that officials were working on fiscal and legal terms and investor protections, but that “there’s a way to go,” Bloomberg reported.
Venezuela’s interim president, Delcy Rodríguez, has since pushed new hydrocarbon laws and signaled a willingness to negotiate tax and royalty rates. “We welcome you back,” she told Exxon executives at the signing, which was broadcast on state television, and said she hoped the memorandum would lead to firm agreements soon.
Exxon would be following Chevron, which long had its headquarters in San Ramon and still runs refineries in Richmond and El Segundo. Chevron never left Venezuela and has committed $7 billion this year to raising its output there.
What it means for California
Most of Venezuela’s oil is extra-heavy crude from the Orinoco Belt, the kind of heavy, high-sulfur crude that complex refineries on the Gulf Coast and in California are configured to process. California refineries now depend heavily on imports: foreign sources supplied 61.1 percent of the crude they ran in 2025, up from about 45 percent two decades ago, according to the California Energy Commission, as in-state production has declined.
More Venezuelan supply on world markets could, over time, ease the price of the heavy grades California refiners buy, but a memorandum is years from new barrels. Any Exxon project would still require a final contract, a sanctions license that fits Treasury’s terms and the stable rules the company has said it needs.
The office of Sen. Jim Risch, the Idaho Republican who chairs the Senate Foreign Relations Committee, and the Washington Office on Latin America, a human rights research group, did not respond to requests for comment from The Inquirer. ExxonMobil’s media office takes inquiries by phone only.
Nasrin Haidari covers foreign affairs and geopolitics, including diplomacy, trade disputes and conflicts, and their ties to California and the Pacific. More from Nasrin Haidari
