Sustainable Switch -Climate change, Venezuela and Big Oil

Jan 13 (Reuters) -

By Sharon Kimathi

Energy and ESG Editor, Reuters

Digitalsharon.kimathi@thomsonreuters.com

Hello!

Venezuela and Big Oil are back in focus in today’s newsletter after major oil companies met with U.S. President Donald Trump last week to discuss plans, while academics at Harvard show the likely cost to the climate.

Let’s dive into the White House meeting, where some of the world's largest oil companies sat with Trump to discuss Venezuela, saying he wanted them to invest $100 billion in the country to vastly expand its oil production.

He praised an agreement with Venezuela's interim leaders to provide 50 million barrels of crude oil to the U.S., where numerous refineries are specially equipped to refine it. Trump said he expects such deliveries to continue indefinitely.

Can they do it?

Chevron is the only U.S. oil major that operates in Venezuela, as a minority partner in joint ventures with Venezuelan state oil firm PDVSA. Chevron has a license from U.S. authorities, which exempts it from the sanctions the U.S. had imposed.

At the White House meeting, Exxon CEO Darren Woods called Venezuela "uninvestable" and said security guarantees and a reform of its hydrocarbon law were needed before Exxon could return to the country. Venezuela had twice expropriated Exxon's assets in the past, Woods said.

The first companies to secure any business in the wake of the U.S. military action to oust Venezuelan President Nicolas Maduro, however, were Dutch-based trader Vitol and Singapore-headquartered peer Trafigura, rather than U.S. majors.

The traders won the Venezuelan oil export deals in part because they have a higher risk tolerance and are more nimble than major publicly traded oil companies, said three participants at the White House meetings.

U.S. oil companies were also more reluctant to take the compliance risk involved in selling oil from tankers that have been blacklisted by Washington for their involvement in sanctioned oil trade, three shipping sources said.

“But even if Venezuela sees a flurry of activity in the next few years, leading to moderate increases in the country’s oil production and sales on the open market, this likely will not be enough to make Venezuela’s oil industry great again,” writes Reuters Energy Columnist Ron Buosso. Click here for the full column.

Click here for a Reuters report on the executive orders to remove the sanctions against Venezuela to speed up oil production.

What will this mean?

Oil production and its nuances aside for a moment, let’s take a look at what environmental issues this poses.

Venezuela’s current oil and gas sector emissions were found to be 4.8 times higher than reported in its U.N. climate submission, according to a recent study by Harvard academics in the Nature journal.

The researchers estimate that as much as 29% of gas produced may be escaping to the atmosphere, a level far higher than average, as stated on the Harvard Climate Blog. Click here to check out their methane tool.

The figure – known as “methane intensity” – is 2.1% in the U.S. and 0.1% in Qatar, a country with modern and concentrated infrastructure to capture gas.

Trump’s latest move to intensify drilling in Venezuela will only lead to higher levels of methane as these figures only factor in what’s been happening from 2023 till last year.

But what do you think? Do get in touch via LinkedIn or my email at Sharon.kimathi@thomsonreuters.com if you have more comments or insights about Big Oil’s dreams in Venezuela and what it means for the world’s emissions.

Talking Points

• Aussie bushfires: Australia’s southeast was engulfed in bushfires for days last week, razing buildings and leaving thousands of homes without power. Police also found human remains over the weekend in the north of the state capital Melbourne, Victoria. The blazes were burning out of control during a summer heatwave and tore through more than 350,000 hectares (860,000 acres) of bushland in Victoria state since the middle of last week.

• Philippines landfill disaster: At least one person was killed and 34 others were missing after a landfill collapsed in the city of Cebu in the central Philippines on Thursday, officials said. Cebu city Mayor Nestor Archival said disaster response units, police, fire brigades, and the military have been deployed, along with ambulances, fire trucks and lighting towers.

• Myanmar ICJ case: Gambia told judges at the International Court of Justice that Myanmar targeted minority Muslim Rohingya for destruction and made their lives a nightmare in a landmark case accusing Myanmar of genocide. The predominantly Muslim West African country of Gambia filed the case at the ICJ in 2019, accusing Myanmar of committing genocide against the Rohingya, a mainly Muslim minority in the remote western Rakhine state. Myanmar has denied genocide. Click here for the full Reuters report.

• Gaza, governance and Bangladesh: Bangladesh has told the U.S. that it wants to join the international stabilization force that would be deployed in Gaza. A United Nations Security Council resolution, adopted in mid-November, authorized a so-called Board of Peace and countries working with it to establish a temporary International Stabilization Force in Gaza where a ceasefire began in October. The truce has not progressed beyond its first phase, and little progress has been made on the next steps.

• Events: ReutersResponsible Business USAreturns May 5–6 in Boston, coinciding with Boston Climate Week. Register now to meet us in person including Reuters U.S. Sustainable Business Correspondent Ross Kerber, Reuters Legal Correspondent Nate Raymond, Reuters Energy Correspondent Timothy J. McLaughlin and Reuters Shareholder Activism Correspondent Svea Herbst‑Bayliss!

ESG Lens

In keeping with the topic of rising emissions in our main focus, a recent report by research firm Rhodium Groups showed that U.S. greenhouse gas emissions rose for the first time in two years – and at a faster pace than the economy grew – by 2.4% in 2025, ​driven largely by increased power sector demand and by fuel use for heating ‌buildings.

Today’s Sustainable Switch was edited by Mark Potter.

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