U.S. May Subsidize Venezuelan Oil Revival, Trump Says
After the dramatic capture of the Venezuelan President Nicolás Maduro, President Donald Trump has revealed ambitious plans for U.S. oil companies to resume operations in Venezuela. The U.S. leader believes that these companies could be 'up and running' within an 18-month period, despite analysts' doubts over the time frame due to the extensive deterioration of Venezuela's oil infrastructure.
Decades of Decline
Venezuela, once a major oil producer, pumping about 3.5 million barrels a day in the late 1990s, now only produces roughly 800,000 barrels a day. Years of corruption, underinvestment, fires, thefts, and state control over the oil industry have left the Latin American country’s crude facilities in tatters.
After two decades of decline in Venezuelan production, industry insiders believe it will take years and colossal sums to bring it back to its maximum level. It is estimated that rebuilding the Venezuelan infrastructure would cost around USD 10 billion annually for 10 years.
U.S. Oil Ambitions
Despite the daunting challenges, President Trump is open about his ambitions for scaled-up U.S. operations in Venezuela. The Secretary of Energy of the United States is set to meet with oil companies to convince them to resume operations in the Caribbean country.
Trump's plans have been met with caution by U.S. oil firms due to the low prices and instability in Venezuela. They are also aware of the country's history of reshaping its relationship with international energy companies, which resulted in the exit of ExxonMobil and ConocoPhillips in 2007.
Reactions and Implications
Trump's ambitious project has stirred significant reactions. Tennis legend Martina Navratilova expressed support for criminal sanctions on American companies that try to take oil from Venezuela.
The U.S.'s actions in Venezuela have also drawn comments from international political figures. Council of Europe Secretary General Alain Berset commented that “the use of force is normalized.”
On the other hand, the White House is reportedly demanding that Venezuela cut economic ties with Russia, China, Iran, and Cuba in exchange for the U.S.'s support with oil production.
Conclusion
As the U.S. plans to return energy investment to Venezuela, the Latin American country still owes billions of dollars to American energy companies following years-old legal battles over oil contracts. Whether these debts will influence the U.S.'s intervention in Venezuela's oil industry remains uncertain.
Trump's goals for reviving Venezuela’s oil industry will not come easily or cheaply. However, the stakes are high as Venezuela holds more crude than established energy heavyweights like Saudi Arabia, Iran, and Kuwait. The Latin American country’s reserves are nearly quadruple those of the United States. The U.S.'s next steps could alter global oil flows and redefine the balance of influence among major powers long invested in the country’s crude.