end of list<\/span><\/section>\nVenezuela possesses the world\u2019s largest known oil reserves \u2013 estimated to be some 303 billion barrels \u2013 but currently produces only a tiny fraction of global output. Its estimated output was 860,000 barrels per day (bpd) in November, less than 1 percent of the world\u2019s total, compared with 3.7 million bpd during peak production in 1970.<\/p>\n
The oil sector\u2019s decline has been blamed on the combined effects of US sanctions and years of underinvestment, mismanagement and corruption under Maduro and his left-wing predecessor, Hugo Chavez.<\/p>\n
While the Trump administration could boost supply in the short term by lifting sanctions, restoring Venezuela\u2019s output to anything near peak levels would require huge investment and likely take years, according to energy analysts.<\/p>\n
\u2018Venezuela\u2019s oil infrastructure is in poor shape\u2019<\/h2>\n
Oil prices moved only slightly in trading on Monday amid market expectations that output would remain largely unchanged for the foreseeable future.<\/p>\n
\u201cVenezuela\u2019s oil infrastructure is in poor shape overall, due to lack of maintenance for both equipment and oilfield wells,\u201d Scott Montgomery, a global energy expert at the University of Washington, told Al Jazeera.<\/p>\n
\u201cThe state oil company, PDVSA, is well known to suffer from corruption and lack of expertise \u2013 many well-trained people have left the country to work elsewhere \u2013 and has been unable to invest in the country\u2019s petroleum sector,\u201d Montgomery added.<\/p>\n
Thomas O\u2019Donnell, an energy and geopolitical analyst based in Berlin, Germany, estimated that Venezuela could return to peak production in five to seven years in the \u201cabsolute best\u201d circumstances, including a peaceful transfer of power.<\/p>\n
\u201cLonger term, if things are sorted out, yes, Venezuela can become one of the world\u2019s biggest producers of oil. As far as how long that takes, that has all to do with the transition and what is put in place to manage that \u2013 both the country\u2019s security and also to manage the investments,\u201d O\u2019Donnell told Al Jazeera.<\/p>\n
Mixed messaging from Trump administration<\/h2>\n
Trump\u2019s administration has provided conflicting messages on Washington\u2019s exact plans for Venezuela and its oil reserves.<\/p>\n
On Saturday, Trump said the US would \u201crun\u201d Venezuela and that US oil companies were ready to invest billions of dollars to build up the country\u2019s dilapidated infrastructure and \u201cget the oil flowing\u201d.<\/p>\n
In interviews with US media on Sunday, US Secretary of State Marco Rubio sought to downplay Trump\u2019s remarks about controlling the country, saying the president was referring to \u201crunning policy\u201d and his plans related to spurring private investment, \u201cnot securing the oilfields\u201d.<\/p>\n
Trump later on Sunday said Washington was \u201cin charge\u201d of the country and was \u201cdealing with\u201d members of the acting administration without providing details.<\/p>\n
Under international law, the US has no claim of ownership over Venezuela\u2019s oil reserves, as sovereign states possess the right to control and use their natural resources under the United Nations-endorsed Principle of Permanent Sovereignty over Natural Resources.<\/p>\n
Foreign investors, however, can claim compensation when authorities seize their assets.<\/p>\n
ExxonMobil and ConocoPhillips were awarded $1.6bn and $8.7bn, respectively, in international arbitration following the Chavez government\u2019s 2007 nationalisation of the oil sector. Caracas did not pay out in either case.<\/p>\n
US oil giants, including Chevron, ExxonMobil, and ConocoPhillips, have not commented directly on Trump\u2019s claims about planned investments in Venezuela.<\/p>\n
Chevron is the only large US\u00a0oil company currently\u00a0operating\u00a0in\u00a0Venezuela, the result of\u00a0an\u00a0exemption to US sanctions first granted by the administration of former President Joe Biden.<\/p>\n
Consultancy Rystad Energy, based in Oslo, Norway, has estimated that Venezuela\u2019s oil sector would need about $110bn in capital investment to return to its mid-2010s output of about 2 million bpd.<\/p>\n
Patrick De Haan, an analyst at energy price tracker GasBuddy, said companies may be reluctant to commit to large investments in the country when global oil prices are hovering around $60 a barrel due to a glut of supply.<\/p>\n
\u201cIt will take a longer amount of time than many likely realise. Oil companies in a low-priced environment of today would likely be cautious investing billions with oil prices already low,\u201d De Haan told Al Jazeera.<\/p>\n
\u201cIn addition, Trump seizing Maduro could lead to loyalists sabotaging efforts to increase output. A lot would have to go right to yield the most optimistic timelines.\u201d<\/p>\n
US companies are likely to carefully weigh political developments in Venezuela following their experiences with the Chavez government\u2019s expropriation of their assets.<\/p>\n
\u201cOil companies are not likely to rush into a situation where the state is in turmoil, security is lacking, and no clear path forward for political stability exists,\u201d the University of Washington\u2019s Montgomery said.<\/p>\n
Maduro due in court in New York<\/h2>\n
Interim President Delcy Rodriguez, who was Maduro\u2019s deputy, is now leading the country following a ruling by Venezuela\u2019s Supreme Court.<\/p>\n
Maduro is scheduled to appear in a New York court on Monday to face charges related to alleged drug trafficking and working with criminal gangs.<\/p>\n
Venezuela\u2019s government has condemned the Trump administration over Saturday\u2019s bombing and overthrow of Maduro, labelling his capture a \u201ccowardly kidnapping\u201d.<\/p>\n
Russia, China, Iran and Brazil, among other countries, have accused Washington of violating international law, while nations including Israel, Argentina and Greece have welcomed Maduro\u2019s forced removal.<\/p>\n
OPEC, which sets limits on production for its 12 members, including Venezuela, is another factor in the Latin American country\u2019s potential oil output.<\/p>\n
\u201cVenezuela is a member of OPEC, and like many countries, may become more actively subject to quotas if output climbs,\u201d De Haan said.<\/p>\n
Phil Flynn, a market analyst at the Price Futures Group, said reviving Venezuela\u2019s oil production would face \u201csignificant challenges\u201d, but he was more bullish about the near-term prospects than other analysts.<\/p>\n
He said the market could conceivably see a couple of hundred thousand more barrels a day coming online in the coming months.<\/p>\n
\u201cWe\u2019ve not had a free Venezuela, and sometimes the US energy industry has the capability to do a lot more than people give them credit for,\u201d Flynn told Al Jazeera.<\/p>\n<\/div>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
United States President Donald Trump has promised to \u201ctake back\u201d Venezuela\u2019s oil reserves and unleash them onto the global market after abducting Venezuelan President Nicolas Maduro. But exploiting the Latin American country\u2019s vast reserves would face a host of big hurdles, from decrepit infrastructure and legal obstacles to leadership uncertainty in Caracas and an excess […]<\/p>\n","protected":false},"author":1,"featured_media":7544,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-7543","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latin-america-news"],"_links":{"self":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/7543","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7543"}],"version-history":[{"count":0,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/7543\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/media\/7544"}],"wp:attachment":[{"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7543"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7543"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7543"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}