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U.S. Energy Secretary Chris Wright said companies are on the cusp of signing a series of deals that will put Venezuela on pace to rapidly expand its output of crude.
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“Several deals will be announced,” Wright told reporters after arriving in Caracas on Tuesday night. “Those deals will lead to a more than doubling of Venezuelan oil production in the next few years.”
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Wright, who is scheduled to meet with acting Venezuelan President Delcy Rodríguez during his visit, is expected to announce more than a dozen agreements with energy companies on Wednesday. The largest is with Chevron Corp., which is significantly expanding its Venezuela operations with two giant oil fields in the Orinoco Belt.
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The trip is intended to demonstrate that private companies are heeding U.S. President Donald Trump’s call to help ramp up Venezuelan crude production following the capture of ex-President Nicolás Maduro. It comes as Trump’s Republican party is under pressure to lower U.S. gasoline prices, which have soared more than 40 per cent this year due to the Iran war, as the November midterm elections loom.
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Trump officials have cast the effort to enlist oil companies from the U.S. and elsewhere to work in Venezuela as a way to limit the influence of Chinese and Russian companies in the region. Shell Plc, BP Plc, Spain’s Repsol SA and Italy’s Eni SpA also are expected to sign deals, Rodríguez said earlier this week on Venezuelan state television.
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The announcements are separate from a plan Trump announced Friday for the U.S. to take control of 65 billion barrels of Venezuela’s oil reserves in partnership with a company run by a controversial energy entrepreneur named Alejandro Betancourt.
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The plan represents an unparalleled modern-day intervention into the economy of a country Trump once called the 51st U.S. state. It would create the world’s second-largest private oil company by reserves, secure American petroleum supplies for decades to come and allow the U.S. to refill its depleted Strategic Petroleum Reserve, U.S. officials have said.
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“Very big times are coming as large investments flow into this country,” Wright said. “What’s a greater reassurance of a good business climate than a partnership between the United States and the government on the ground in Venezuela?”
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Analysts and others have said it’s unlikely companies can ramp up Venezuela’s crude production quickly enough to bring down U.S. gasoline prices in the months ahead. While the nation has some of the world’s largest reserves, its oil fields have significantly deteriorated after years of under-investment and are plagued by broken pumps, leaky pipelines and spotty access to electricity.
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Although Venezuela’s crude output has risen this year, the country pumped just 1.16 million barrels a day in July, according to a Bloomberg survey. That’s less than half the amount it produced a decade ago.
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It could take more than a decade to restore production to the roughly 3 million barrels a day Venezuela pumped before its oil industry began a decades-long collapse, industry experts have said.
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With assistance from Mie Dahl
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