In a significant move following the political change in Venezuela, the United States has announced it will take control of the country's future oil sales. The stated aim is to use the revenue generated to help rebuild Venezuela's shattered economy.
Leverage Through Oil Control
United States Energy Secretary Chris Wright made the announcement at the Goldman Sachs Energy, Clean Tech & Utilities Conference held in Miami. He explained the strategic reasoning behind the decision. "If we control the flow of oil and the flow of the cash that comes from those sales, we have large leverage," Wright stated. He emphasized that this control is necessary to drive essential changes within the South American nation.
The US government plans to deposit all proceeds from these oil sales into designated government accounts. These funds will then be directed towards initiatives intended to benefit the Venezuelan people directly, addressing the economic crisis that has plagued the country.
Reviving a Crumbling Industry
Since the toppling of the Nicolas Maduro government, the Trump administration has been actively urging major American oil companies to return and help. Firms like Chevron Corp., ConocoPhillips, and Exxon Mobil Corp. are being pushed to revive production and repair Venezuela's decrepit oil infrastructure.
The scale of the task is enormous. A Bloomberg report estimates that it could cost up to $10 billion per year for the next decade to fix pipelines, pumping stations, and other critical equipment. This infrastructure has suffered from years of corruption, severe underinvestment, and neglect.
Despite sitting on the world's largest crude oil reserves, attracting long-term investment requires stability. Companies are seeking assurances of a stable government and continued support from Washington, even after President Trump leaves office.
Engagement with Oil Majors
The administration is already in talks with multiple oil companies. According to officials, President Trump is scheduled to meet with energy executives at the White House within the next week. Secretary of State Marco Rubio is also expected to attend this planned meeting.
Currently, Chevron is the only US major operating in Venezuela, doing so under a special license from Washington. Both Exxon and ConocoPhillips had operations in the country but left in the mid-2000s after their assets were nationalized by Maduro's predecessor, Hugo Chávez.
Secretary Wright provided an optimistic production outlook, estimating that Venezuela's crude output could be increased by several hundred thousand barrels per day in the short to medium term with the right investment and management.
