White House oil meeting on Venezuela includes independents, and strong links to Denver

The White House is summoning oil executives to discuss potential investment in Venezuela today (9 January), and while a preliminary list of attendees features the big names of American oil - Chevron, Exxon Mobil and ConocoPhillips - it also includes several smaller independents and private equity-backed players.

Only the largest United States (US) oil producers have the scale and capacity to operate in Venezuela and have experience doing so, said an oil industry source. The inclusion of smaller domestic companies in the meeting is notable given that they mostly operate in the US.

Continental Resources, which bills itself as the biggest privately owned oil and natural gas producer in the world, will be in attendance, as will HKN Inc., which was formerly known as Harken Energy.

Several of the companies have connections to Denver, Colorado, the home turf of Secretary of Energy Chris Wright and a relatively small hub for oil and gas activity compared to other parts of the United States.

Oil output in PADD 4, the production region that includes Colorado, totaled 1.02 million barrels per day in October, according to the latest data from the US Energy Information Administration. PADD 3, which includes states like Texas and New Mexico, produced 10.28 million bpd that month.

Raisa Energy, which acquires non-operated stakes in energy assets and has a Venezuelan CEO, is based in Denver and backed by investment funds Citadel and Ares Management.

Tallgrass Energy - a midstream company with pipeline and terminal assets in areas including the US Rocky Mountains and Oklahoma - and Aspect Holdings, which lists former Speaker of the US House of Representatives Kevin McCarthy as an independent director, are also headquartered in Denver.

The Department of Energy did not immediately respond to a request for comment. Raisa, Tallgrass, and Aspect did not immediately reply to questions about any previous discussions they may have had about Venezuela ahead of the Friday meeting.

Many of the smaller firms and independents may not have as much experience with heavy oil that is typical in Venezuela, but they will be familiar with lighter oil around Lake Maracaibo and shale that has not yet been tapped, said a long-time oil industry executive.

"They don't have as much capital as an Exxon, Chevron or ConocoPhillips, but independents are known to move much faster. Their cost structure is lower, so they can drill wells much cheaper than the majors," the person said.