While much attention is focused on the Strait of Hormuz, through which 20 percent of the world’s oil passes, significant energy developments are taking place further south—in Venezuela. There, the U.S. captured former president and dictator Nicolás Maduro in January as part of Operation Absolute Resolve.
Maduro is currently in a prison cell in Brooklyn, New York, awaiting trial on charges of narco-terrorism and drug trafficking. Trump has long sought to access Venezuela’s vast resources and has been frustrated by the missed opportunities in doing so:
Venezuela has the world’s largest oil reserves. Under Venezuela’s former president Nicholas Maduro oil exports had dropped significantly, due to a lack of investment. Then came US sanctions against any imports from the Latin American country.
But US President Donald Trump vowed to tap those reserves after the US military captured Maduro in a surprise, night-time raid in January.
Now the oil is flowing again in Venezuela. In March, the country’s monthly crude exports surpassed one million barrels per day. The first time since September.
There is no shortage of untapped energy in the oil-rich South American nation and U.S. companies are vying for a big piece of the pie – which will benefit not just Americans, of course, but also the vast majority of Venezuelans:
International oil majors Chevron (CVX.N) and Shell (SHEL.L) are closing in on the first big oil production deals with Venezuela since the U.S. capture of President Nicolas Maduro in January, five sources close to the negotiations told Reuters.
The deals would allow both companies to boost production in coveted oil regions in the South American country, the biggest steps to date toward what U.S. President Donald Trump has said would be a $100 ?billion effort to rebuild Venezuela’s oil industry after decades of mismanagement and underinvestment under Maduro and his predecessor Hugo Chavez.
According to Andy Walz, the president of the refining, transportation, and chemical industry division of the American company Chevron, Chevron currently imports an average of 250,000 barrels of oil from Venezuela per day
"We believe that we can increase this volume by another… pic.twitter.com/bE9PA20drX
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“We believe that we can increase this volume by another 50%, that is, to about 350,000–400,000 barrels per day, just by Chevron’s share in Venezuelan oil,” he adds.
Now that Maduro is out of the way, energy opportunities are expanding greatly, and thanks to Trump’s action, the United States is set to reap the rewards:
Venezuela’s National Assembly in late January approved a sweeping reform of the country’s main oil law. It now grants foreign companies autonomy to operate, export and sell Venezuelan oil even when they are minority partners of state-owned oil company PDVSA.
Chevron and Venezuela’s energy authorities have agreed on preliminary terms to expand Chevron’s largest oil project, Petropiar, in the vast Orinoco Belt, two of the sources said.
The fact is, Chevron is already refining a huge amount of Venezuelan oil:
Chevron now imports the equivalent of 250,000 barrels of Venezuelan crude oil per day, on average, says Andy Walz, president of downstream, midstream and chemicals at Chevron.
“We think we can take that up another 50% so call it somewhere around 350,000 to 400,000 barrels a day of just the Chevron share of our position in Venezuela.”
Although the U.S. does not heavily rely on oil from the Strait of Hormuz, the ongoing conflicts in the Middle East and Iran’s threats to this crucial waterway have unsettled energy markets and driven gas prices up at the pumps. The more we can diversify our oil supply, the better protected we will be. Venezuela, which has some of the largest oil deposits in the world, is a great place to start.
Maduro isn’t missed one iota, and thanks again to President Trump for having the you-know-whats to pull this off.
