Hard Pass!

I'm sure you've all heard that our illustrious leader has removed Venezuelan President Maduro from power.  This post is NOT designed to discuss the legal or ethical issues surrounding the removal itself.  No, today, I'm going to discuss the oil.  I'm sure you've heard that POTUS plans to, ummm, liberate the oil, and he's asked the oil industry to participate in the event.  When this story came out, the CEO of ExxonMobil said that the country's oil is "uninvestable."  Before I get into my commentary, I'd like to give you a little background.

To my understanding, Venezuela currently holds the world's largest proven oil reserves. Proven oil reserves are known quantities, using current economic conditions and current technology.  In other words, we know how much oil is there, and we know how much we'll profit by extracting it.

The thing is, Venezuela has a history of not playing nice with international oil conglomerates.  Their oil was state owned in the 70's.  The 80's and 90's brought economic hardship because oil prices crashed, and private companies were allowed to come invest.  In the late 90's and early 00's Venezuela changed their mind and re-nationalized their oil.  ExxonMobil's stake was expropriated in 2007.  Basically, Venezuela said to the oil companies "Hey dudes, we'll be generous and let you have minority stake in your companies, but you need to give us controlling interest."  Some companies, such as Chevron and BP agreed.  ExxonMobil and ConocoPhillips didn't agree, so the country took control and kicked them out.  I'm going to refrain from judging the merits of this state takeover of private industry.  That's beyond the scope of this little post.  What I am trying to do is demonstrate that ExxonMobil has history with Venezuela.

Now that the historic story is shared, let me recap the recent events:  Trump invaded Venezuela and deposed Maduro.  Trump then invited oil companies to step in and help "liberate" the oil.  ExxonMobil has politely declined.  This makes sense.  If I worked with Joe Blow in the past and Joe ripped me off, I'd be hard pressed to re-engage, regardless of the circumstances.

But what's Trump's reply?  I'm inclined to exclude ExxonMobil from this offer.  From my perspective, that's kind of like me saying I'm having a party at venue XYZ.  And when I hear that John Smith isn't interested in attending my party, I say that I'm inclined to make sure that John Smith isn't invited to my party.  Meanwhile, John's real reason for not joining the party is because he knows the venue sucks.  There are too few bathrooms, it's in a crappy are of town, and the acoustics suck.  In other words, ExxonMobil is totally justified in saying "Hard Pass!"