President Trump is pitching regime change in Venezuela as an energy opportunity, but the path from military operation to meaningful oil production is anything but straightforward,.<\/b>
\nPresident Trump is pitching regime change in Venezuela as an energy opportunity, but the path from military operation to meaningful oil production is anything but straightforward, the Wall Street Journal reports. At a Mar-a-Lago press conference, Trump said the ouster of Nicol\u00e1s Maduro would clear the way for \u00ab\u00a0very large United States oil companies\u00a0\u00bb to move in, spend billions rebuilding Venezuela’s dilapidated energy sector and \u00ab\u00a0start making money for the country.\u00a0\u00bb He suggested the US would retain a portion of future oil proceeds as compensation for \u00ab\u00a0damages\u00a0\u00bb he said Venezuela caused the US\u2014a view consistent with his long-stated belief that oil should be treated as a spoil of war and a lever of American power.<\/p>\n

The fundamentals, however, are daunting. Venezuela’s oil industry has been hollowed out by years of corruption, nationalizations, and an exodus of skilled workers. Production has fallen to about 900,000 barrels a day, roughly a third of it from Chevron, now the only major US operator left and the country’s largest foreign investor. Other giants such as Exxon Mobil and ConocoPhillips quit in 2007 after then-President Hugo Ch\u00e1vez seized assets; both sued and recovered only portions of their claims after lengthy arbitration. Any new entrants would have to weigh that history, the country’s unsettled political transition, and oil prices stuck below levels that typically justify major new investment.<\/p>\n

\u00ab\u00a0The potential to boost Venezuelan production hinges on capital, which in turn depends on political stability and likely requires guarantees from the US government\u00a0\u00bb, one analysts note issued Sunday said, per Axios. Even if Washington can open the door, American companies \u00ab\u00a0will be wary to enter without a stable security environment, and very favorable terms to reduce the risk\u00a0\u00bb, another note said. Secretary of State Marco Rubio acknowledged that Sunday, saying companies would need \u00ab\u00a0certain guarantees and conditions.\u00a0\u00bb Venezuela holds what it says are more than 300 billion barrels of proved reserves, mostly heavy crude prized by refiners in the US Gulf Coast and Asia.<\/p>\n

To attract broad foreign participation, analysts said, a new Venezuelan government would likely need to overhaul oil laws to limit state interference, negotiate with multilateral lenders for infrastructure financing, and restructure roughly $160 billion in national debt, along with settling outstanding investor claims. As one Caracas-based economist put it, per the Journal, reviving the sector would resemble a Marshall Plan, not a quick drilling campaign. Now that Maduro is toppled, industry veterans warn that building the stability and legal certainty needed to unlock Venezuela’s oil in a big way will be the real test.<\/p>\n