Trump’s Pledging Big Investment in Venezuelan Oil. The U.S. Oil Industry Has Been Silent.

The United States’ oil industry appears wary of President Donald Trump’s repeated pledges that companies are going to spend billions of dollars upgrading decrepit Venezuelan oil infrastructure following the capture of Nicolás Maduro.

The companies themselves have stayed largely silent since Saturday, when Trump promised that the American oil industry would “go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.”

None has provided on-the-record statements about their plans beyond Chevron, which said it was focused on protecting its assets in the country. And the American Petroleum Institute, the leading industry association for American oil and gas companies, has not met with the Trump administration about this issue.

Rather, oil analysts have made clear that American and multinational oil giants don’t have an economic incentive to pony up investments in Venezuela, despite it being home to the largest oil reserves in the world.

Unless the Trump administration can address the serious safety issues, fear of regime instability, and longstanding legal concerns, the president’s pledge to “take the oil” remains a giant question mark.

“I really don’t know, who are the players that win from this?” said Ed Hirs, an energy markets analyst and professor at the University of Houston. “It’s not obvious, that’s for sure.”

One Democratic House staffer who works on oil and gas issues described the entire conversation about Venezuelan oil as “kind of absurd.”

The global price of oil has dropped so low that companies have been laying off staff and slowing production, creating an environment that would make it difficult to justify billions of dollars in new production in a country with a notoriously unstable business environment.

Oil companies are reporting declines in activity and continued pessimism about future outlooks, according to the two most recent quarterly energy surveys from the Dallas Federal Reserve.

“Decreasing oil prices are making many of our firm’s wells noneconomic,” one firm wrote in the most recent survey.

In that context, asking companies to invest billions to increase production in a different country and eventually drive global prices down further makes little sense, the House staffer said.

“The price, the economics of it, do not work out right now. Again, if they’re going to make any sort of significant investments, it’ll be years and years away,” this staffer said.

Trump suggested that the United States would subsidize investment in Venezuelan energy infrastructure during a Monday interview with NBC News.

A senior White House official said that outreach to oil companies has already begun and will continue, led by Energy Secretary Chris Wright and Secretary of State Marco Rubio.

On the record, White House spokesperson Taylor Rogers said that oil companies are “ready and willing to make big investments in Venezuela” and that “American oil companies will do an incredible job for the people of Venezuela and will represent the United States well.”

The only American oil company currently operating in Venezuela is Chevron, and it is the company best positioned to make some early investments that could boost production. Though Chevron has permission to operate in the country, it has not been allowed to invest, and changes on those restrictions could lead to upgrades that would increase oil output by a few hundred thousand barrels (a relatively small amount), Homayoun Falakshahi, head of crude oil analysis at data analytics firm Kpler said during an industry analysts’ briefing Tuesday.

Oil refineries on the Gulf Coast, which are designed to process the heavy crude specific to Venezuela, and not the light crude produced in the U.S. Permian Basin, would also benefit from an increased flow of Venezuelan crude oil.

But an industry source told NOTUS that those refineries view Venezuelan crude as a nice-to-have, not something they need or have been hoping for.

Ultimately, oil companies need stability, safety and a good legal framework to operate — and they also will need a clear financial incentive, according to a Tuesday report from Wood Mackenzie, a leading energy research and consulting firm.

The investment options in Venezuela offer none of those things — especially given the country’s history of nationalizing refineries, and the lack of clarity about the country’s leadership going forward.

“Venezuela is a long term play. Post-2030 the Permian may have peaked, other big sources may have depleted, so a giant resource is valuable. But it also means that none of this big, new production is happening anytime soon,” said David Goldwyn, chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group and a former State Department envoy for international energy affairs.

The reality that Trump even suggested subsidies indicates the administration is aware of the complications of this venture.

“No company will build a business based on government subsidy,” Goldwyn said.