Donald Trump said that American companies would rebuild Venezuela's failing oil industry. But the world's largest proven oil reserves, which are located in the country, may pose more risk than reward for U.S. oil giants, energy industry observers tell CNN.
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Extracting more oil from Venezuela would require rebuilding the country's damaged oil infrastructure, which would cost billions of dollars, according to Donald Trump himself. And oil prices are not high enough to encourage this type of investment. Moreover, refining a particular grade of Venezuelan crude oil is itself a costly endeavor.
“This whole matter leaves more questions than answers about the future political situation in Venezuela, and this is an issue that will be a priority for corporate and industry planners who want to consider the opportunities that exist there,” Clayton Seigle of the Center for Strategic and International Studies told CNN.
Oil in Venezuela
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Maciej Zieliński, Adam Ziemienowicz / PAP / photos
On Saturday, American special forces carried out a large-scale operation in which they managed to capture Venezuelan President Nicolás Maduro and his wife Cilia Flores and transport them to New York. They were both charged with drug-terrorist conspiracy and weapons offenses.
Donald Trump said the United States will “rule the country” until secure leadership is established. On the same day, Venezuela's Supreme Court installed Delcy Rodriguez — who oversees the state oil company Petróleos de Venezuela, S.A. — as interim president.
See also: Venezuela has more oil than Iraq. “The next 48 hours are crucial”
Donald Trump talks about “stolen oil”. What is his plan for Venezuela?
“We're going to allow our huge American oil companies, the largest in the world, to come into the country, spend billions of dollars, fix the crappy infrastructure, the oil infrastructure, and start making money for the country,” Trump said.
Foreign oil companies have been operating in Venezuela for over a century. American companies have built the entire refining infrastructure for the Venezuelan grade of crude oil.
But when socialist Hugo Chávez took office in 1999, he took direct control of state giant PDVSA and allowed Venezuela's oil infrastructure to crumble, with oil production falling by more than a third over the past quarter-century.
“We built the Venezuelan oil industry with American talent, commitment and skill, and the socialist regime stole it from us,” Trump said Saturday.
See also: Tankers suddenly began to disappear from radar. And this was right after Maduro was detained
Chevron has been operating in Venezuela for over 100 years
“Chevron has literally been in this market for 100 years and has seen it all and endured difficult times to now be in a really advantageous position,” Seigle told CNN.
Another analyst emphasizes that Chevron's presence will make it more difficult for new or returning players to compete.
“You can't just go into Venezuela and pump oil. It's an extremely difficult and complex process, and Chevron has been successful at it over the years, but few companies have the technology,” analyst Michael Klare told CNN.
Source: CNN
