"The theory sounds straightforward. Venezuela has vast oil reserves and used to produce more than three times as much volume as it does now. Therefore it should be a simple matter to upgrade the crumbling kit with an injection of dollars and watch the extra barrels and profits flow. That, roughly speaking, is the only clear part of Donald Trump's plan for what happens next in Venezuela."
"The reality looks difficult. From the point of view of US oil companies, the invitation or command from the White House is not straightforward. The possible exception is Chevron since it is already in Venezuela via a handful of joint ventures with the country's state-owned oil company. If sanctions, quotas and government restrictions were now to clear, it could probably find ways to boost production efficiently."
Venezuela possesses vast oil reserves and previously produced more than three times current volumes, suggesting potential for significant output restoration. Proposals call for major US oil companies to invest billions to repair dilapidated oil infrastructure and increase production. Chevron already has small joint ventures and could expand quickly if sanctions and restrictions lift. Other majors face complex risk-reward calculations given required capital — Rystad Energy estimates $115bn to double output to 2m barrels a day — and simultaneous political pressure to reduce long-term oil prices toward $50 per barrel. Major global oil companies are unlikely to prioritize Venezuela immediately.
Read at www.theguardian.com
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