Trump’s new focus on Venezuelan oil reinforces claim action was never about ‘war on drugs’ | Venezuela
Donald Trump, who hailed the US military operation to capture Nicolás Maduro as magnificent, extraordinary and “an attack not seen since World War II”, surprised many by making Venezuelan oil the main focus of his hour-long press conference on Saturday.
The US president made little mention of the “war on drugs”, his main justification for the months-long military buildup and attacks on boats that killed 116 people; instead, he referenced oil more than a dozen times, even though it was never mentioned in the questions.
Trump’s insistence reinforced a claim made repeatedly by Venezuela since the tensions began: Trump was ultimately trying to oust Maduro and seize the country’s vast natural reserves.
Just as he did weeks ago when he announced an “all-out blockade” of sanctioned oil tankers, Trump said that Venezuela, which has the world’s largest reserves, had “stolen” oil from the United States and that the oil would now be taken back.
“We built Venezuela’s oil industry with American talent, effort and skill, and the socialist regime stole it from us during previous administrations. And they stole it by force. This constituted one of the largest thefts of American property in the history of our country,” Trump said, repeating almost verbatim. Publish on X In mid-December, by homeland security adviser Stephen Miller.
But while analysts trace the origins of Trump’s claim – decisions by previous Venezuelan governments to nationalize production – they argue that the US has no legal claim to Venezuelan oil.
José Ignacio Hernández, a legal expert and Venezuelan oil industry researcher with consulting firm Aurora Macro Strategies, said: “Venezuela has not stolen any oil from the United States, even though a past government has illegitimately expropriated the oil assets of U.S. companies without fair compensation.”
Other analysts note that that US companies never owned the oil or land in Venezuela; They held exploration privileges that gave temporary operating rights, not permanent ownership. Under international law and the UN principle of permanent sovereignty over natural resources established in 1962, sovereign states have the right to control and dispose of resources within their territory.
U.S. companies have been drilling for oil in Venezuela since the early 1900s, and over the past century they have been joined by companies from other countries such as Italy, France, Spain, China, Russia, the Netherlands and the United Kingdom.
In 1943, Venezuela mandated that 50% of profits go to the state, and in 1976 centre-left president Carlos Andrés Pérez nationalized the industry, creating the state-owned Petróleos de Venezuela SA (PDVSA).
U.S. companies such as Exxon and Mobil, which merged in 1999, and Gulf Oil, now part of Chevron, suffered an estimated $5 billion in losses, but were awarded compensation of about $1 billion each.
In 2007, Maduro’s predecessor and mentor, Hugo Chávez, seized control of the remaining oil operations, which were still run under private agreements. ExxonMobil and ConocoPhillips rejected the new contract terms and nationalized their assets. Chevron agreed to stay.
Francisco J Monaldi, director of the Latin American Energy Program at Rice University’s Baker Institute for Public Policy, said: “ConocoPhillips and ExxonMobil split, went to international arbitration and won. In ConocoPhillips’ case, they are still owed more than $10 billion. So the company is likely to be a key player in any negotiations to get that money back, possibly by partially returning it to the country.”
However, returning is not that easy.
Analysts note that there has never been an independent audit to determine exactly how large Venezuela’s reserves are, made impossible by years of Chavista authoritarianism. And after years of mismanagement and corruption under the Chavez and Maduro regimes, combined with heavy damage from US sanctions, Venezuela’s oil production falls far short of its potential. Moreover, most of its reserves consist of “heavy sour” crude oil, which is more difficult and expensive to extract.
The country is currently a marginal player, accounting for less than 1% of global production. Monaldi estimates that Venezuela’s current production of just under 1 million barrels per day could rise to 4 million or even 5 million barrels; However, this will require an investment of approximately 100 billion dollars and at least ten years.
“I’m not sure if they [US companies] “We will be eager to return,” he said.
Despite Trump’s claims of oil “theft”, Chevron still retains about 25% of operations in Venezuela. PDVSA controls about 50%; about 10% of these are in Chinese-led joint ventures, another 10% are from Russia and 5% are from European companies.
During Trump’s first term, the United States imposed sanctions banning imports of Venezuelan oil. Joe Biden eased those restrictions in hopes that Maduro would allow a democratic transition after the 2024 elections in Venezuela. This election is now believed to have been stolen, and Trump has reimposed sanctions. Some analysts claim that: Sanctions contributed to preventing Venezuela Payment of compensation owed to ExxonMobil and ConocoPhillips.
Even during sanctions, Chevron never completely suspended its operations and kept its operations at sharply reduced levels. Trump briefly revoked the company’s license but reversed course in July, ordering that the royalties be used to cover operating costs and pay off Venezuela’s long-standing debt to the company, not the Maduro regime.
“If the transfer of power is consolidated and sanctions are lifted, the company that will benefit the most will be Chevron because it is already in operation,” Monaldi said. “But this will require significant investment because Venezuelan state companies are effectively fragmented and have very limited capacity at this point.”
