Big Oil Knows That Trump's Venezuela Plans Are Delusional

"Although President Trump has declared that America's oil companies will soon "go in" to Venezuela and "spend billions of dollars" to rebuild that country's petroleum industry, the administration is making two huge assumptions. First, that unleashing Venezuelan oil would yield lower energy prices for American consumers and giant profits for American companies. Second, that unlike previous administrations, which got bogged down for decades in failed nation building in Iraq and Afghanistan, Trump can simply let great American companies do what they do best-drill, baby, drill."

"But my conversations with several oil-industry veterans and energy analysts indicate that the administration has the situation precisely backwards: Restoring Venezuela's oil industry is completely unrealistic in the short term, and might not be in America's economic and geopolitical interests at all. "Trump seems locked in the world of the 1980s and '90s, when the U.S. imported most of its oil from a handful of foreign sources," Arnab Datta, a lawyer who specializes in energy markets, told me. "But today, America is the world's biggest oil producer. The play for Venezuelan oil doesn't make a whole lot of sense for the new world we're in." "

"The Trump administration is right about one thing: Venezuela has a lot of oil. As recently as the '90s, it was one of the world's top producers, pumping out more than 3 million barrels a day. But in the early 2000s, the populist leader Hugo Chávez forced out most Western oil companies, seized their assets, and turned their operations over to the country's dysfunctional state-owne"

The Trump administration assumes U.S. oil companies can quickly restore Venezuelan production to lower domestic energy prices and profit handsomely. Industry veterans and energy analysts say that expectation is outdated and unrealistic in the short term. America is now the world's largest oil producer, weakening the economic case for Venezuelan output. Executives warn Venezuela is currently uninvestable. Venezuela once produced over three million barrels per day, but Hugo Chávez expelled Western firms, seized assets, and transferred operations to a dysfunctional state entity, leaving the industry degraded and difficult to rebuild.

Read at The Atlantic