US Takes Majority Ownership of Venezuelan Oil Venture
President Donald Trump has found an unusual solution to his Venezuela problem - he's taking majority ownership in a joint oil venture with a Venezuelan energy company. The deal, announced on Friday, could be a game-changer for both the US oil industry and the Venezuelan economy.
Venezuela is crucial to America's energy security, with the country now being the No. 2 source of imported oil to the US, behind only Canada. The US has more than quadrupled its crude imports from Venezuela this year, reaching a record high of around 600,000 barrels per day.
The new joint venture will control 65 billion barrels of Venezuela's proven oil reserves, which is roughly 22% of the country's total reserves. This could significantly reinforce the US-Venezuela relationship and provide assurance to skeptical US companies looking to invest in Venezuela.
However, experts warn that it may take years for additional oil to be produced in Venezuela, as the country needs billions of dollars in foreign investment to restore its oil infrastructure to its former output. Chevron is expected to play a key role in the deal, but even their investments alone will not be enough to get Venezuela back up to its production peak.
Despite these challenges, the deal could provide a much-needed economic boost to Venezuela, which has been ravaged by decades of government mismanagement and corruption. The country's new government has opened its oil industry to private-sector participation, but without sufficient protections for investors, few have been willing to take the risk.