Washington, D.C., – Breaking News: President Donald Trump said that American oil companies could get Venezuela’s oil industry “back on its feet” in 18 months. The announcement is a few days at most after a stealth U.S. military raid managed to remove Nicolás Maduro from power.
“This could be done in a simpler form and it could be done very merit-based,” President Trump said in an exclusive interview with NBC News. “It’s going to take a tremendous amount of money, but it can be done quickly.” He suggested that the U.S. government would promise to repay oil companies for their costs from future profits reaped by Venezuela in selling its oil.
An Oil Price War, or Gamesmanship?
The President is anxious to tap into Venezuela’s giant oil reserves (the world’s largest, estimated at 303 billion barrels) intending to help stabilise U.S. gas prices and the global energy market. Trump reiterated that reopening Venezuela’s oil fields will be good for “keeping gas prices low” in the United States and injecting profits into U.S. oil companies.
However, industry analysts are sceptical. And analysts say a bona fide recovery could take at least 10 years and more than $100 billion in investment to repair Venezuela’s shattered oil sector.
Meeting with U.S. Oil Executives
The Trump administration is set to brief the chief executives of top U.S. energy companies later this week on efforts by Saudi Arabia and Russia to flood the market with cheap oil. The negotiations will centre on how to safely re-enter Venezuela’s devastated oil sector. So far only Chevron is operating under special exemptions, ExxonMobil and ConocoPhillips are waiting for the public tune to change while Total has not yet made any commitments.
Experts have cautioned that Venezuela’s oil refineries and drilling platforms are in a state of collapse after years of neglect, theft and mismanagement. Compounding the problem, Venezuela’s crude oil is “heavy,” as in thick and thus harder to refine than that found in areas like Texas or Saudi Arabia.
The “Stolen Oil” Controversy
President Trump has also defended the United States’ intervention by asserting that Venezuela “stole” American oil property many years ago. In fact, Venezuela has twice nationalised foreign oil investments, first in 1976 and more recently in 2007, with unpaid compensation to U.S. companies totalling billions of dollars.
Yet energy experts say that the situation is nuanced. If equipment and facilities were expropriated, the oil beneath the soil has always belonged to the people of Venezuela, they say.
Global Impact and Economic Stakes
As the 18-month clock starts ticking, however, all eyes are on whether American technology and oil know-how can actually rebuild Venezuela’s economy and lift the country back to its old status as a leading global oil exporter. A quick rebound in Venezuelan oil production could upend global supply chains and contribute to lower energy prices around the world. If it succeeds, the shift could be one of the largest geopolitical and economic changes in the world in decades.
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