The reality of moving in and consolidating control of long neglected facilities is one huge obstacle by itself, but when you factor in political instabilty and security risks, oil companies will not risk the lives of its employees to carry out Trump's vision. I believe we've all seen this play out before, under another Republican President.
Republicans never learn.
There’s a familiar ring to President Donald Trump’s plan to send U.S. energy giants to Venezuela to use the wealth generated from rekindling long-stalled oil production to stabilize that country and cement American energy dominance: Similar ambitions accompanied the U.S. invasion of Iraq in 2003.
The quick riches promised did not materialize there, as firms grappled with years of political turmoil and security threats, struggled to negotiate workable contract terms and confronted vexing infrastructure inadequacies. Venezuela may not be any easier, industry analysts warn.
“One of the clear lessons from Iraq — and it is not unique to Iraq — is that you need to have stability and be able to assess risk before you can start production,” said Kevin Book, managing director at ClearView Energy Partners, a research firm. Until then, he said, companies may not be enthusiastic about making the billions of dollars in investments required in Venezuela.
It’s unclear which firms Trump was referencing at a news conference Saturday morning, when he said: “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go and spend billions of dollars to fix the badly broken infrastructure, the oil infrastructure.”
Chevron, which operates there now, declined to comment on plans.
He said restoring peak oil production there would cost up to $100 billion and take about a decade. And that is assuming there is enough political stability for companies to operate unencumbered during that entire period.
There are other obstacles. The oil in Venezuela is a heavy form of crude that is more difficult to process and carries a heavier carbon footprint than oil pumped elsewhere. Venezuela’s power grid is on the brink, creating an uncertain outlook for oil production, which requires massive amounts of energy. Also, Russian and Chinese firms partnered with Venezuela after U.S. companies left the nation, complicating the reestablishment of U.S. firms.
ExxonMobil and ConocoPhillips exited the country and saw their assets seized after refusing to meet the terms of Venezuela’s government nearly two decades ago. ExxonMobil did not respond to requests for comment.
“It would be premature to speculate on any future business activities or investments,” ConocoPhillips spokesman Dennis Nuss said in an email.
But the appeal is clear. Venezuela has one of the biggest oil reserves in the world, estimated at 300 billion barrels.
“Every major oil company in the world and some of the smaller ones will look closely at this because there are very few places on Earth where you could increase production so much,” said Francisco Monaldi, director of the Latin American Energy Program at Rice University. “But first you need political stability and clarity.”
WaPo
Republicans never learn.
There’s a familiar ring to President Donald Trump’s plan to send U.S. energy giants to Venezuela to use the wealth generated from rekindling long-stalled oil production to stabilize that country and cement American energy dominance: Similar ambitions accompanied the U.S. invasion of Iraq in 2003.
The quick riches promised did not materialize there, as firms grappled with years of political turmoil and security threats, struggled to negotiate workable contract terms and confronted vexing infrastructure inadequacies. Venezuela may not be any easier, industry analysts warn.
“One of the clear lessons from Iraq — and it is not unique to Iraq — is that you need to have stability and be able to assess risk before you can start production,” said Kevin Book, managing director at ClearView Energy Partners, a research firm. Until then, he said, companies may not be enthusiastic about making the billions of dollars in investments required in Venezuela.
It’s unclear which firms Trump was referencing at a news conference Saturday morning, when he said: “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go and spend billions of dollars to fix the badly broken infrastructure, the oil infrastructure.”
Chevron, which operates there now, declined to comment on plans.
He said restoring peak oil production there would cost up to $100 billion and take about a decade. And that is assuming there is enough political stability for companies to operate unencumbered during that entire period.
There are other obstacles. The oil in Venezuela is a heavy form of crude that is more difficult to process and carries a heavier carbon footprint than oil pumped elsewhere. Venezuela’s power grid is on the brink, creating an uncertain outlook for oil production, which requires massive amounts of energy. Also, Russian and Chinese firms partnered with Venezuela after U.S. companies left the nation, complicating the reestablishment of U.S. firms.
ExxonMobil and ConocoPhillips exited the country and saw their assets seized after refusing to meet the terms of Venezuela’s government nearly two decades ago. ExxonMobil did not respond to requests for comment.
“It would be premature to speculate on any future business activities or investments,” ConocoPhillips spokesman Dennis Nuss said in an email.
But the appeal is clear. Venezuela has one of the biggest oil reserves in the world, estimated at 300 billion barrels.
“Every major oil company in the world and some of the smaller ones will look closely at this because there are very few places on Earth where you could increase production so much,” said Francisco Monaldi, director of the Latin American Energy Program at Rice University. “But first you need political stability and clarity.”
WaPo
