During the press conference yesterday Trump said:
“We are going to be running it [Venezuela] with a group … we are going to rebuild the oil infrastructure”
Source: Youtube
Timestamp: 37:25
1) For those who weren't around in 2007, quick history
In 2007, Hugo Chávez forced foreign oil companies into PDVSA-controlled joint ventures. PDVSA is the Venezuelan state oil company. Foreign operators were told to hand over majority ownership or leave. For the US this meant:
- ExxonMobil refused. Assets in the Orinoco Belt were expropriated. Years of arbitration followed.
- ConocoPhillips refused. Same outcome. Large projects seized.
- Chevron accepted minority stakes and stayed operational.
Result? Production fell from ~3.2 mbd to well below 1 mbd.
2) What a “rebuild” actually looks like
This is not about new mega-projects. It starts with fixing what already exists. Workovers on shut-in wells. Pipeline repairs and leak control. Stabilizing heavy crude upgraders. Restoring export terminals. + Venezuelan crude is extra-heavy. You cannot produce it without services, chemicals, and constant intervention.
3) Who makes money first?
- Phase 1: Oilfield services. Short contracts. Fast cash flow. Low political risk.
- Phase 2: Operators with existing licenses and assets.
- Phase 3: Majors that demand long-term legal certainty.
Where I put my money
Phase 1: Schlumberger, Halliburton, Baker Hughes
Phase 2: Chevron
Phase 3: ConocoPhillips, ExxonMobil
Doubts:
Isn't this all a bit premature? Yes, absolutely, but the stock market doesnt let you wait until it's all said and done.
Isn't it late already? Maybe, all these companies are already up ±2-10% premarket. But I'd say it's still early.
About Phase 3 players I’m unsure how they will react. They will want their settlements but I doubt Trump will give them any without joining the rebuild. I guess they’d be repaid by grants for rebuilding. But I’m unsure. The uncertainty is why I put them 3rd. Maybe one of you guys has better theories.
Do with this as you will. I'm in and shared my view. happy to see yours.
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TL;DR
Trump said: “We are going to be running it [Venezuela] with a group … we are going to rebuild the oil infrastructure”. A rebuild starts with repairs, not new oil dreams. Oilfield services get paid first, Chevron benefits next. Exxon and Conoco are optional upside, not the core play. Might be too early to call or too late already according to premarket but I'm in. My bet is on: Schlumberger, Halliburton, Baker Hughes and Chevron for now.
Trump hands Oil rebuild to US Giants
byu/Loightsout inwallstreetbets
Posted by Loightsout
13 Comments
Isn’t the same regime still running the country?
I know very little about oil production so I won’t say anything about that except – would the oil companies still be interested ? 20 years later, with unknown amount of upfront investment needed.
Other than that it’s not premature in general, just high risk. Given the current admin track record they might have a concept of a plan, and nothing beyond that.
Aligned.
O&G Services providers were already trading at
low P/E ratios prior to this so there’s already some downside mitigation on those plays.
It’s heavy crude, you fucking imbeciles. The cost of securing it will far outweigh the cost of extracting it.
I’ll stick to Mr Global when it comes to oil advice
The temperature of the room right now is hilarious.
“T-daddy says we get their oil now because we kidnapped their pres.
But let’s think about it what kind of long term investment and returns are we going to get”
You guy are acting like the US has not only fought a war with Venezuela, but are occupying the country in such a stable way oil infrastructure can be seized, constructed and controlled without Venezuelan counterattack or resistance.
VENEZUELA IS %70 MOUNTAINOUS JUNGLE.
It has unenforceable land borders with many countries next to it. Including countries currently under threat from the US.
The US is acting alone, there is no coalition of countries here, this isn’t Iraq and this isn’t Afghanistan.
The US has not landed an expeditionary force in Venezuela yet. There literally isn’t a beach head.
For a country that just lost two back to back forever wars this takes the cake.
It’s the worst start of one of the hardest wars the US has ever faced and no one knows why it happening or who it will happen to next.
Additionally funny you all haven’t noticed that Venezuela now knows they are in an active war… before a shock and awe campaign has started.
So even the DUMBEST general is now ordering all oil infrastructure in Venezuela to be wired with so much explosive ordnance it’s going to make Desert Storm look like a small tire fire.
Already 10% up, all of them
Could the prices fall due to maintainence cost or what ever method to reasemble them refineries or could It be upwards from now one if they get subsidized by US money upfront or how Will It workout?
Venezuela has everything.. oil.. gold and natural gas..
OXY.
For anyone wanting to look at the actual price action and fundamentals instead of the narrative, here’s the SLB ticker page:
[https://aimytrade.io/ticker/SLB](https://aimytrade.io/ticker/SLB)
So they’ll just walk right into the country without any resistance and snatch everything like it’s all theirs to own, right?… Right??
This is about as regarded as regards melting their spoons down to make garage silver. No US oil company is gonna go in on this shit cause the cost and time is too stupid to even consider. They are all just gonna nod along with grandpa 🥭 and then he will fall asleep and forget all about this shit. Next week it’s on to some other stupid shit and this “investment” will be forgotten