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Rex Tillerson Could Become a Nightmare for Maduro

By: Orlando Avendaño - @OrlvndoA - Dec 20, 2016, 6:02 pm
Rex Tillerson, former CEO of ExxonMobil, has butted heads with Venezuela in the past (
Rex Tillerson, former CEO of ExxonMobil, has butted heads with Venezuela in the past (The Forward).

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Donald Trump‘s recent appointment of Rex Tillerson, CEO of ExxonMobil, as Secretary of State, has generated controversy and concerns. Human rights groups, political opponents, democrats and skeptics of the Russian government are alarmed; However, they are not the only ones who should be concerned.

“Tillerson’s experiences as a high-level oil executive coupled with Trump’s approach to US foreign policy could create problems for Venezuela, the Latin American petro-state that is undergoing an intense political and social crisis,” reads Business Insider.

In an article titled “Trump’s Nominee for Secretary of State Could Cause Problems for the Largest Oil Producer in Latin America,” the author notes that the Venezuelan Government has maintained relations with the United States since President Hugo Chávez took power in 1999.

In 2000 the Chávez government tried to renegotiate agreements with the foreign oil companies that were in Venezuela. However, two did not collaborate with the Chavez administration: ExxonMobil and ConocoPhillips, which frustrated Chavez’s Bolivarian Revolution.

“While other corporations negotiated with the Venezuelan government, so that Venezuela could obtain majority participation in oil companies throughout the country, only ExxonMobil and ConocoPhillips rejected the agreements and sought international arbitration,” Tulane Research Center member Tim Gill tells Business Insider.

When Venezuela expropriated the assets of the two companies, ExxonMobil packed up shop and left, filing legal action against the Venezuelan government.

“Seven years later, the World Bank’s international arbitration tribunal ruled in favor of ExxonMobil, but gave the company a much smaller amount than it expected: US $1.6 billion; Instead of the US $ 16.6 billion “requested by the oil company.”

In this sense, Tillerson had lost: ExxonMobil was defeated by the Chavista government. Venezuelan oil industry consultant Ghassan Dagher told the New York Times: “Tillerson was devastated by the event … In my opinion, he took it very personally against Chávez.”

However, the situation did not end there. Tillerson and the Venezuelan government would meet again, but this time the oil giant’s adversary would be Chavez’s successor: Nicolás Maduro.

The oil company’s CEO “once again became entangled with Venezuela in 2015 … when ExxonMobil began its oil exploration efforts off the coast of Guyana, off of Venezuela’s eastern border.”

“Even more than ExxonMobil’s refusal to negotiate [several years ago], its efforts in 2015 to seize oil off the coast of the Essequibo region infuriated President Maduro and the Venezuelan government, including the opposition,” noted Tim Gill in remarks made to Business Insider.

The Essequibo is a territory that has been disputed for years by the Governments of Venezuela and Guyana: “Both Venezuela and Guyana have claimed this area and, as a result, oil companies have decided not to muddy relations between the two countries,” says Gill. Nonetheless, the area is a major source of oil.

But ExxonMobil ignored the delicate situation in the Essequibo region, and, instead, decided to reach an agreement with the new administration in Guyana to exploit the resources of the area.

Thus, in the wake of a tense relationship between ExxonMobil and the Venezuelan administration, the oil company’s ex-CEO and current Secretary of State, could pose a real headache for Nicolas Maduro’s dictatorship.

Source: Business Insider

Orlando Avendaño Orlando Avendaño

Orlando Avendaño is a PanAm Post intern who resides in Caracas, Venezuela, where he studies social communication at Andrés Bello Catholic University. Follow @OrlvndoA.