Exxon signs a Venezuela deal 10 months after calling it "uninvestable", but it is non-binding

ExxonMobil has signed a memorandum of understanding with Venezuela's government and state oil company Petróleos de Venezuela (PDVSA) for "potential upstream opportunities," Bloomberg reported on November 9 and updated on November 10, citing the company's own statement. Bloomberg notes that such memorandums are typically non-binding. The New York Post, which also covered the signing, quotes an Exxon spokesman calling it "a meaningful first step."

It is a sharp turn in tone. The Post reports that CEO Darren Woods called Venezuela "uninvestable" at a White House reception in January, and said Exxon has had its assets seized there twice. Exxon left the country more than two decades ago, after the government took over foreign-run oil production in 2007.

What is actually signed, and what is not

Nothing here commits Exxon to spend money. The memorandum lets the company evaluate and negotiate; the same spokesman told the Post that "any future investment would require stable policies, clear regulations, strong investment protections and competitive returns." That is a list of conditions, not a plan. Woods said on the latest earnings call that Exxon is "not in a rush," and that Venezuelan barrels would have to be developed "at a very competitive cost" to compete on world markets, according to the Post.

The Wall Street Journal reported in September that Exxon was close to a preliminary deal and was weighing a package that included fields holding more than 50 billion barrels in the ground, per the Post's summary. A resource in the ground is not production, and the gap between the two is years and billions of dollars.

Why the door is open now

The Post says interim president Delcy Rodríguez signed a package of oil reform bills this summer that gives private companies majority control over production operations and leaves PDVSA in the minority. That is the specific change Exxon's old objection was about. Rodríguez, who once accused Exxon of conspiring against Venezuela, said she hopes the company invests "under very favorable conditions," as quoted from BNamericas. The Post also cites the US Energy Information Administration: US crude imports from Venezuela in July were the highest since 2017. Chevron, which has operated there for more than a century, is the incumbent US major.

What it means for the stock and for oil

Exxon traded at $164.42 at 12:51 PM ET, down 0.19%, and Chevron at $210.46, down 0.15%, according to Nasdaq.com. Neither moved on the news, which fits a document that obliges no one to anything. For oil, there is no near-term supply effect: no field, volume or timetable has been announced. The price story this week is still the Middle East; see Brent below $90 for the first time since August.

Who this touches

Fleet operators and fuel-heavy small businesses should read this as a long-dated supply option, not a pump-price event. Heavy Venezuelan crude matters to Gulf Coast refiners, but that is a story for years of drilling. For fuel costs now, watch the crude benchmarks, covered in our gas price report.

What to watch: a binding agreement naming specific fields, a legal guarantee on investment protection, or a capital figure from Exxon. Until one of those appears, this is an intention to talk.

Sources: Bloomberg; New York Post; New York Times and Wall Street Journal coverage of the same deal; Nasdaq.com quotes at 12:51 PM ET. This is market information, not investment advice.