Exxon Mobil’s (XOM) shares closed lower on Thursday despite reports that the U.S. crude oil giant is making moves to join rival Chevron (CVX) in efforts to tap into Venezuela’s massive reserve of fossil fuel.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
ExxonMobil Eyes Return to Venezuela
According to The New York Times, ExxonMobil is engaging in discussions with stakeholders to acquire the rights to produce oil in the Latin American country, which has the world’s largest proven crude oil reserve. If such a deal pulls through, it will mark the return of the Texas-based oil supermajor to Venezuela after almost two decades.
ExxonMobil exited the South American country in 2007 after former President Hugo Chávez nationalized the country’s oil industry, forcing foreign oil companies to either accept minority control or leave the market. This left Chevron as the only U.S. company with a significant operational presence in Venezuela.
U.S. To Be ‘Strongly Involved’ in Venezuela
However, ExxonMobil appears set on changing that. The latest moves come as the U.S. capture of Venezuelan leader Nicolás Maduro in early January recast spotlight on the Latin American company.
Despite its huge reserve, crude oil production in Venezuela has remained crippled for years due to economic mismanagement and corruption. Following the capture of Maduro, President Donald Trump said the U.S. will be “strongly involved” in Venezuela’s oil industry and that American oil companies will pump billions into the country’s “badly broken” oil infrastructure.
Last month, a group of U.S. oil executives traveled to Caracas, Venezuela’s capital, for direct talks with Delcy Rodriguez, who has been acting as president since Maduro’s capture. This came after industry executives in January attended a White House meeting to discuss investment in Venezuela’s oil industry.
Is ExxonMobil Stock a Buy, Sell, or Hold?
On Wall Street, analysts continue to consider ExxonMobil’s shares as a Moderate Buy based on their consensus rating. This breaks down into 13 Buys and seven Holds issued over the past three months.
However, the average XOM price target of $170.58 implies roughly 10% upside in the months ahead.
