Geopolitics loom large over Big Oil earnings as investors seek Venezuela details
Exxon Mobil executives and Chevron executives will likely face more questions on their investment opportunities in Venezuela when they speak with analysts this Friday. After President Donald Trump announced that he wanted to invest $100 billion to increase and control Venezuelan crude oil production, the U.S. captured and removed?Venezuelan president Nicolas Maduro in early this month. The dramatic shift in geopolitics that occurred after renewed U.S. - China trade tensions, and Russia - Ukraine peace talks during the 4th quarter of 2025 led to fluctuating oil price. Investors also have been focused on the widespread anti-government demonstrations in Iran, and a potential U.S. reaction in recent days.
Exxon, Chevron and TotalEnergies will release their fourth-quarter earnings and annual results on Friday. BP, Shell and TotalEnergies, the three major European oil companies, will be reporting next month.
Stephanie Link, the chief investment strategist of Hightower Advisors - a major shareholder both in Chevron as well as Exxon - said that Chevron would be 'in the spotlight in Venezuela due to its being the only American oil company currently operating there. However, the topic is likely to come up with all oil companies, she added. Venezuelan oil accounts for 1%-2% of Chevron’s cash flow. The company could add another 1%-2% to its production in the coming years, according to Jason Gabelman.
Jean Ann Salisbury of Bank of America Global Research wrote in a note that there are still too many questions to answer to be able to accurately determine the value of Venezuela for Chevron?s business over the long-term.
Chevron is still in the "key" position in our eyes, she said, because of its personnel, existing relationships and payment mechanisms. But we need more information to assign value, she added. Analysts say it's unlikely that companies will reveal much detail about potential Venezuela plans due to the long-term timeline for oil projects.
EXXON IS LIKELY TO ASK QUESTIONS ABOUT GUYANA One of the major questions for Exxon is whether it will be able access to new parts of Stabroek Block, a prolific oilfield in neighboring Guyana. 30% of this field remains unexplored because of territorial disputes between Guyana & Venezuela.
Exxon holds a 45% stake in the oil consortium that operates the Stabroek, while Chevron?holds a 30% interest. Exxon CEO Darren Woods called Venezuela "uninvestable", during a White House Summit earlier this month. He said the company needed protections for investment after its assets were expropriated two times. The biggest oilfield in Kazakhstan, Tengiz, suffered a shutdown of production this month. This was the latest setback following the attack by Ukrainian drones on the field's main export route. Chevron is the leader of Tengiz's joint venture, while Exxon has a stake.
WEATHERING OIL PRICES CAN SQUEEZE EARNINGS
Exxon had previously indicated that lower crude oil prices could reduce its fourth-quarter earnings upstream by as much as $1.2 billion in comparison to the previous three month period. Wall Street is expecting the U.S.'s largest oil producer to report adjusted earnings per share of $1.68, an increase of 1 cent over the previous quarter.
Analysts expect Chevron's adjusted earnings per share to be $1.46, a 29% drop from last year.
Brent crude prices were $63,08 per barrel in the quarter from October to December, down 7.5% on the previous three-month period, due to fears that the oil market was oversupplied.
The fourth quarter saw a 32% increase in U.S. Natural Gas prices, averaging $4.04 for every million British Thermal Units. This was due to colder weather conditions and increased demand for liquefied gas.
Link, of Hightower Advisors, stated that investors would continue to be attentive to any changes in the outlook of companies for the remainder of the year as well as shareholder returns.
She said: "I do not expect any changes in dividend or buyback programs for 2026. But their guidance on these topics will be very important." Sheila Dang reported from Houston and Nia Williams edited the story.
(source: Reuters)