Maduro says the real reason for Trump’s Venezuela fixation is oil – is he right? | Venezuela

Venezuela’s dictator Nicolás Maduro says the real motivation behind the massive US military buildup in the Caribbean is oil: his country has the world’s largest proven reserves.

US State Department denial It insists airstrikes on boats that killed more than 80 people and a massive military deployment off the coast of South America were part of a campaign against drug trafficking.

Either way, Donald Trump appears committed to regime change in Venezuela, whose main allies are China, Russia and Iran, and which is suffering a deep economic collapse that has triggered the region’s largest migration crisis.

But Trump has proven happy to strike deals with authoritarian leaders elsewhere, and air strikes on small boats in the Caribbean are unlikely to have much impact on the flow of drugs, most of which enter the country via Mexico; This leads the US president’s critics to conclude that there must be another motive at play.

Colombia’s leftist president, Gustavo Petro, who is himself in an increasingly bitter feud with Trump, described the three-month campaign against Caracas this way: “Oil negotiation”He argues that Trump “does not even consider democratizing Venezuela, let alone drug trafficking.”

But analysts who know how Venezuela’s oil industry works say it’s not that simple.

“I think oil could be one of the motivations [of the military buildup]but not the main one. That’s just part of the picture,” said Francisco J Monaldi, director of the Latin American Energy Program at the Baker Public Policy Institute at Rice University in Houston.

First of all, he said, “Venezuela is a very small player at this point.”

The country holds almost a fifth of all known global reserves but accounts for less than 1% of world production. Most of Venezuela’s reserves consist of “heavy sour” crude oil, which is more difficult and expensive to extract. Meanwhile, the oil sector has been hobbled by decades of corruption, mismanagement and underinvestment.

Monaldi estimates that current production of just under 1 million barrels per day could increase to 4 million barrels or even 5 million barrels per day; However, doing so will require an investment of approximately $100 billion and will take at least 10 years.

After a strike by oil workers in the early 2000s, Maduro’s predecessor and mentor, Hugo Chávez, laid off scores of workers at the state-owned Petróleos de Venezuela Sociedad Anónima (PDVSA) and consolidated government control over the company.

His government later decided that PDVSA should have at least 51% ownership and operational control of all exploration fields, alienating multinationals such as ConocoPhillips and Exxon-Mobil that had long operated in the country.

Production fell sharply, especially after the United States imposed sanctions banning imports of Venezuelan oil during Trump’s first term. Joe Biden eased these restrictions in the hope that Maduro would allow a democratic transition, but after last year’s election (widely believed to have been stolen by Maduro) Trump reimposed sanctions.

But even during sanctions, US-based oil giant Chevron never completely suspended its operations in Venezuela and managed to continue, albeit at greatly reduced levels.

Trump revoked Chevron’s license, but reversed course in July, ordering that the royalties be used to cover operational costs and pay off the Venezuelan government’s long-standing debt to the U.S. company, rather than being transferred to the Maduro regime.

Although the Maduro regime’s lack of transparency is reflected in the oil sector, analysts estimate that PDVSA currently retains 50% of operations; Chevron, 25%; 10% in Chinese-led joint ventures; 10% from Russia; and 5% by European companies.

Since Trump recently eased restrictions, Chevron has been importing between 150,000 and 160,000 barrels a day into the United States.

“I believe that Chevron will be the main beneficiary of the political change in Venezuela,” said José Ignacio Hernández, a legal expert and Venezuelan oil industry researcher who works with the consultancy Aurora Macro Strategies.

But Hernández, who was a member of Juan Guaidó’s team when the opposition leader declared himself interim president in 2019, also rejects the idea that oil was the main focus of the US campaign.

“The oil sector in Venezuela has been destroyed… It is not an attractive market in the short term, especially for a country like the United States, which already has the largest production in the world,” he added.

Hernández drew attention to the recent news during the meetings with US ambassadors: Maduro offers to open all current and future oil and gold projects to US companies. “If Trump wanted to make a monopoly deal on Venezuelan oil, he would accept Maduro’s offer,” Hernández said.

Monaldi said that even if there is a regime change and a US-backed candidate comes to power, the final decision on whether to invest in Venezuelan oil will ultimately belong to the companies, which will focus on political and economic stability above all else.

“Venezuela has huge resources, a lot of infrastructure, and areas that have already been developed, you don’t just go there and do research from scratch… But at the same time, there are tons of potential hurdles: political risks, the history of the country, the fact that oil is less valuable,” he said.

“So the obstacles are mostly above ground.”