President Trump recently announced a blockade on sanctioned oil tankers going in and out of Venezuela, ramping up pressure on President Nicolas Maduro to step down. Trump says the blockade will remain until the country returns the oil he claims was, quote, "stolen" from U.S. oil companies. Now, the U.S. has already seized two oil tankers with ties to Venezuela, and it is pursuing a third. Chevron is the only U.S. oil company in Venezuela at the moment. And according to Politico, some American oil companies have already told Trump that they are not interested in returning to the country, even if there is a regime change. Venezuela has the world's largest oil reserves, so why wouldn't America's oil giants want to do business there? Well, to help us answer that question, we're joined now by Scott Modell, CEO of the energy consulting firm Rapidan. Welcome.
SCOTT MODELL: Thank you, Ailsa.
CHANG: So I want to start with the president's words here. In a post on Truth Social he said that pressure on Venezuela would continue, quote, "until such time as they return to the United States of America all of the oil, land and other assets that they previously stole from us." Can you talk about what you think the president is talking about there?
MODELL: When the president talks about stealing oil. I think he's basically saying others have come in - China, Russia, Iran and others - and our influence in this hemisphere has slipped away, and particularly in Venezuela. And he has been long focused on Venezuela. It is an oil-rich country, as you said, and Trump believes that we should have primacy there, we should be in the driver's seat with regard to oil production and development, as we were in the past when Conoco was there, when Exxon was there and when others were there, and then all of a sudden they were expropriated and kicked out. You ask about why U.S. companies aren't going to rush back in. There's a high bar for them to go back in. There's a high bar for them to think, well, this time it's going to be different.
CHANG: Well, are you having those conversations with board members? Like, do you have any sense of how the heads of oil companies have been reacting to the developments in Venezuela right now?
MODELL: I think they're looking at it with caution. I don't think that they're eager to jump in. I know the president is eager to see Conoco back in and Exxon back in, and for us to quickly follow a regime change of sort, with inflow of U.S. companies, back to the way things were. But the boards are going to be very reluctant. Until you have a stabilizing of above-ground political risk in Venezuela - and that's going to take years - I don't think you're going to see them rushing back in.
CHANG: What about the financial challenges of returning to Venezuela? Like, what kind of infrastructure would need to be built if these companies even wanted to do business there?
MODELL: That's a great question. I think the first thing they're looking at, when you look at the oil fields - they're oil wells and those wells are corroded. Pipelines that they have are corroded. Blending facilities need to be repaired. Just getting a reliable flow of electricity to the fields has been a problem. Oil operations regularly shut down to grid failure. So they're going to be concerned about water and power and things like that as well.
CHANG: And then on top of all these very real challenges that you're outlining, Venezuela's economy is in bad shape, right? Like, there's hyperinflation. People of prime working age are leaving the country. There's government corruption. I mean, why would any company rationally invest in this country with all these problems? What do you think?
MODELL: I don't think they will, because again, in addition to all the oil infrastructure things that the Conocos and Exxons are going to want to see, it's basic rule of law. Even if you have Maduro and...
MODELL: ...And this Chavista establishment at the very top change, their ecosystem is still going to be their courts and regulators and state oil institutions. Those are going to take years to become predictable.
CHANG: But is the federal government doing enough to tempt these oil companies in the U.S. to do business in Venezuela? Like, President Trump has made it very clear that he does support the oil industry. So is he providing enough financial incentives to make doing business in Venezuela palatable, you think?
MODELL: Ailsa, I don't think so. I think that they're just having the discussion now. They're trying to get people to start considering it seriously. But big oil companies are going to be comparing Venezuela to other places that are relatively more attractive, like Guyana. Even if Venezuela does improve, and even if President Trump does tout it as a place that he wants to incentivize oil companies to go back to, the majors today are going to be pickier.
CHANG: That is Scott Modell, CEO of the energy consulting firm Rapidan. Thank you very much.
MODELL: Thank you, Ailsa, for having me.
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