A big part of Trump’s Plan for Venezuela involves U.S. oil companies investing a lot of money into getting Venezuela’s oil industry back on its feet. But the oil companies don’t seem to be leaping at the opportunity. This is from Politico:
Administration officials have told oil executives in recent weeks that if they want compensation for their rigs, pipelines and other seized property, then they must be prepared to go back into Venezuela now and invest heavily in reviving its shattered petroleum industry, two people familiar with the administration’s outreach told POLITICO on Saturday. The outlook for Venezuela’s shattered oil infrastructure is one of the major questions following the U.S. military action that captured leader Nicolás Maduro.
But people in the industry said the administration’s message has left them still leery about the difficulty of rebuilding decayed oil fields in a country where it’s not even clear who will lead the country for the foreseeable future.
“They’re saying, ‘you gotta go in if you want to play and get reimbursed,’” said one industry official familiar with the conversations.
The offer has been on the table for the last 10 days, the person said. “But the infrastructure currently there is so dilapidated that no one at these companies can adequately assess what is needed to make it operable.”
So the oil execs must have known that Trump planned to invade Venezuela and seize assets for several weeks. But this article is saying none of them seem all that eager to go along with the plan.
A central concern for U.S. industry executives is whether the administration can guarantee the safety of the employees and equipment that companies would need to send to Venezuela, how the companies would be paid, whether oil prices will rise enough to make Venezuelan crude profitable and the status of Venezuela’s membership in the OPEC oil exporters cartel. U.S. benchmark oil prices were at $57 a barrel, the lowest since the end of the pandemic, as of the market’s close on Friday.
Trump has already announced that the oil companies will be rebuilding the infrastructure. He said something about them being “reimbursed,” but gave no details about what that would mean. Probably Trump doesn’t know what it means, either. He’s not a policy details guy.
But this is reminding me of the Bush Administration’s half-assed planning for “regime change” in Iraq, which is to say they had no plan other than ousting Saddam Hussein. There’s an excellent retrospective of What Went Wrong in Iraq at the Brookings Institute, The Seven Deadly Sins of Failure in Iraq: A Retrospective Analysis of the Reconstruction. It’s very much worth reading, especially since most of the “sins” are already present in Trump’s Venezuela gambit. And I doubt very much that the oil execs are eager to march into Venezuela anytime soon. If within a few months the country is reasonably peaceful they might send people into the old oil fields to do an assessment. And even then they might say no.
There’s a good backgrounder on Venezuela’s oil industry and its relationship with the U.S. at Wikipedia. That relationship is old and messy. Venezuela is sitting on the world’s largest known oil reserve. But much of it is “heavy crude,” which is more expensive to extract and refine than most other oil. Plus the existing oil infrastructure in Venezuela is old and decayed, and oil production in Venezuela has slowed to a trickle for the past few years. I don’t see the oil execs agreeing to anything until all the details are worked out. And that’s going to take a while.
There are more complications. Trump has rejected Venezuelan opposition leader and Nobel Peace Prize winner María Corina Machado as Maduro’s puppet replacement. Instead, he has decided that Venezuela’s Vice President Delcy Rodríguez should take over. Trump has told reporters that Rodriguez already has been sworn in as president, although there’s no indication from Venezuela that has happened. And Rodriguez seems to not want to be a puppet.
The 56-year-old former labour lawyer struck a defiant tone in her televised speech on Saturday night. She condemned the abduction of Maduro and his wife, Cilia Flores, and demanded their return.
“What is being done to Venezuela is an atrocity that violates international law. History and justice will make the extremists who promoted this armed aggression pay,” she said. “There is only one president in Venezuela and his name is Nicolás Maduro.”
So the regime change thing may take some more work.
Josh Marshall also says that no one person in the Trump administration is really in charge.
Let me reiterate a general point I’ve made in other posts. I don’t think there’s any actual reason we’re invading Venezuela or trying to decapitate its government or whatever we’re doing. I think there are two or three different factions in the government each pushing a very hostile policy toward Venezueala for differing reasons. Meanwhile, Trump thinks it’s cool and has a personal beef with Maduro. That combination of factors created a lot of forward momentum within the U.S. government with nothing pushing back in the opposite direction. That gets you to today. My point is that it’s a mistake to think there’s a “real” reason mixed in with other subterfuges and rationales, or that it’s important to find out which one the “real” reason is. It’s not that linear or logical.
And I think it’s safe to say the whole bleeping Trump Administration has gotten itself into something that’s way over its head. Not the first time, of course. But they’re about to learn that the military operation that seized Maduro was the easy part. They’re at great risk of finding themselves in an unpopular quagmire that will drag on for many months and possibly years.
Josh Marshall (toward the end of your post) is spot on. There isn't a plan. One more echo of the past – I don't remember the occasion – but George W Bush at one point was waving around a "plan" for something, I don't remember what. On examination it was nothing more than a sheaf of talking points, empty rhetoric. This is what passes for a plan among these fools. They think they can dictate reality with their words. Nothing has changed.
I sometimes tune into this particular psychic, who was a former journalist and can be very perceptive at times. She also echoes the theme that this is nothing different from the past, and that: everything 47 has done domestically has failed. Pushback from the courts, from the public etc. 47 needs a huge distraction from Epstein – enter Wag the Dog. It's going to blow up in 47's face, but that's how he rolls – creating one disaster after another to keep his opponents off balance. There is no plan.
I also follow Paul Warburg who's been giving great analysis about Russia and Ukraine. He's good at fitting together the dozens of pieces in a situation, this is his take on Venezuela.
Another amazing person I follow is Elvira Bary, a writer who was born in the Soviet Union, moved to the US twenty years ago. Trump's swift move, bloodlessly decapitating Venezuela's leadership in a matter of hours, has totally embarassed Putin and the whole Russian system, which has thrown millions of men and rubles into Ukraine over the last four years and is losing. It illustrates Putin's staggering incompetence.
Russians are also concerned that 47 may take next door Guyana, adding to the total oil under US control, and thereby have a lot of power over the price of oil, giving us economic leverage over Russia. Won't happen anytime soon given the condition of Venezuela's oil infrastructure and the reluctance of the oil companies to move in, but this is a worry for Russia.
I don't agree that Russia is 'losing' in Ukraine, but the cost of that war does leave them with less resources to throw into more distant theaters like Venezuela.
OTOH, Russia prolly isn't too worried about competition from Venezuelan oil, which is (1) mostly very heavy oil and (2) far from Eurasia. Russia is more interested in exporting NatGas than oil.
"prolly"
Because probably is too hard?
re Russia losing Ukraine – I offer Ukraine Never Ceases to Amaze Me in response. Every day that goes by Russia is getting weaker, Ukraine's position stronger. It's better for Putin to sue for peace now, rather than later, behind all the kabuki and feints.
I write "prolly" all the time. It's a contraction I like. Languages are living things and evolve.
During Fiona Hill's testimony to Congress on Oct 14, 2019, she described how Trump and Putin discussed exchanging Ukraine for Venezuela. The quid pro quo was if Trump refuses to help Ukraine fight off a Russian invasion, Putin would not help Venezuela (a Russian ally) resist a US takeover.
https://bsky.app/profile/portlandken.bsky.social/post/3mbkvasixyc2q
I'm pleasantly surprised to hear that Trump is not backing Machado, and instead seems fine with letting Venezuela's Government continue under Vice President Darcy (not sure that's her real Title). I view Machado as the CIA candidate, and I hate/fear the CIA more than I hate Trump.
IMO, Leaving Darcy in charge is far smarter than declaring that Machado is the legitimate President and enforcing that with US troops. Darcy – like Maduro before her – has expressed willingness to open Venezuela up to investment from US Oil Majors. Leaving her in place puts the responsibility for maintaining order on her Government, rather than the US Military (which would be disastrous for both countries).
Of course, abducting Maduro under the fig leave of 'law enforcement' was a criminal act, but it's really no different than the abduction of Noriega from Panama under GHW Bush. That 'law enforcement operation' involved an actual invasion and a [reasonably short] occupation; hundreds of Panamanians got killed. So far, it appears that snatching Maduro involved a much lower body count.
I expect that there will be a lot of political pressure to 'finish the job'; Trump seems more able to ignore such pressure than most US politicians.
Note: The real reason behind GHWB's invasion of Panama was control of the Panama Canal, which really is a 'vital national security concern', whereas Venezuela is just another case of US Commercial interests getting the US Gov't to shake down Latin American countries for cheaper bananas and higher profits.
U.S. oil companies did not ask Trump to help them get back into Venezuela, and there's every indication they will refuse to do so even now. Read the post.
I *did* read the OP; I don't comment on things I don't read.
What I see is that the Oil Majors are saying that they would need to be *very* certain about long-term stability in Venezuela before they commit to investing $10+B to fix/upgrade the drilling infrastructure there. Also, global oil prices right now are kinda low, so the expected ROI isn't great.
I don't think this proves that "U.S. oil companies did not ask Trump to help them get back into Venezuela", though it does indicate friction between them and Trump. Maybe they want Machado in charge? Or Gov't money up front before they invest? I dunno; we'll see (maybe).
I suspect that the larger framework is that China takes a different view of such investments, both because it would be a 'strategic investment' (providing China with broader supply options AND undermining US dominance over Latin America) and because they care more about long-term ROI than US investors. I read elsewhere that there was a Chinese delegation in Venezuela when we kidnapped Maduro; the timing may not be coincidental…
Or maybe they don't want to mess with Venezuela at all. There's way too much risk for the amount of investment that would be required. And dealing with Trump is like dealing with quicksand. This is not something they asked for.
"Darcy" should be "Delcy". Plz excuse my cranial flatulence.
I don't know of any poll that can answer the question "Do citizens of Venezuela want communism?" Any path forward with an ounce of credibility with the UN and/or international law needs elections. Trump thinks he will be able to appoint the leaders there like he appointed his Cabinet here.
An article quoting the responses by countries around the world are NOT encouraging, and incomplete. But Great Britain is saying, "We had nothing to do with this." Other countries are more direct in their condemnation. EVERYONE is calling for the US to follow international law. That's not going to happen, particularly in giving Venezulan citizens the power to pick its own leaders.
The oil companies are not hurting financially right now. There's no incentive to take huge risks. Nicaragua could easily let the US rebuild the oil fields and flip to communism, take everything the US has built, and hopefully send a 'thank you' note to big oil.
Trump thinks Big Oil will jump at the chance for 'free' oil. They might not be pumping oil from Venezuela in three years, and if Democrats win in 2028, Big Oil could lose its entire investment. Democrats have no incentive to honor deals that expand fascist control over foreign countries and their resources.
There's much disagreement over the four-word statement, "It's about the oil." It is and it isn't. The invasion would not have happened if there wasn't huge wealth underground for the US to steal. But Trump is interested in power, not that wealth. Trump offered 'free' oil because Trump expected the profitability of free oil would be enormous. And Trump would personally be able to dole it our or cut it off to the oil companies who do his bidding. Trump wants to retain power but his popularity is declining. Gas under $2 would work for a lot of voters. But Trump wants Big Oil to back him fiancially without reservation or limitation. Free oil is the hook, but power is what Trump wants to reel in.
If he's gonna, this is the moment I expect Trump would pardon G. Maxwell. If he doesn't, it won't happen.
That "free" oil is going to take massive investments by the oil companies, and there's a big possibility the shifting political tides will end the project before it's ready to turn a profit. Trump is going to have to offer huge guarantees to the oil companies to get them in, and they have no reason to trust him.
He's not going to pardon Maxwell. That gets him nothing.
I have two thoughts to share:
1) When I read a major US network news description of the "operation" that kidnapped Maduro, I got this strange feeling out of nowhere. I began to see the whole thing in the light of Obama's operation to take out Bin Laden. Given drumph's performative nature, and his inferiority complex, the whiner-in-chief just can't stand not looking superior to that awful N-word president. You know, the Nobel Prize thing, and this operation looks like a reality TV scripted event to out do 44. More than one thing can be true: I think he also views control of oil as a source of economic and military power, at least in the present, so I'm sure that's also a motivator. As for his fantasy that this will make the oil barons richer than they are, that's also a motivation. But as always, he never thinks things through and will never be capable of following through on anything.
2) This morning I saw a list of the top countries' known oil reserves. The US is 11th on the list. The only "friendly" country in the top 10 is Canada. The rest include mostly Middle Eastern countries & Russia, and do we really want to rely on so-called ally Saudi Arabia (you know, the country that likes to murder journalists)?
So my conclusion is this: The reality is that we still need fossil fuels to sustain civilization as we know it…for a while until we develop the alternatives. But that Venezuelan oil is dirty and heavy. I say leave it the f*** in the ground. Keep fossil fuels expensive to incentivize development of clean energy.
Mother Nature is giving us warnings. We don't need to double down on fossil fuels. We need to clean up our act. To think we can conquer Mother Nature is foolhardy arrogance, and cannot end well.
Here's a link to the world oil reserves:
https://www.worldometers.info/oil/oil-reserves-by-country/
My understanding is that the alternative technologies are well advanced now and are reliable and more cost effective than the old oil technology. Iceland, Norway, and a few other countries are now getting all of their electricity from renewables. We’re behind here because the oil companies have too much power.
re
Agreed re. electricity.
We still need petroleum fuels for some things. Air travel, military defense, possibly maritime inter-country commerce shipping. Maritime shipping can ultimately go nuclear. I doubt there's any potential for nuclear powered aircraft. Electric aircraft has some potential but we're a long way from the scale we would need. Even interstate trucking cannot go entirely without fossil fuels this month… it will take a long time to completely turn over the current inventory of diesel semis to electric. Those rigs are worth a lot of money; many independent truckers in hock for them in order to be in business. They can't just be discarded and new debt created to purchase the electric equivalents that are even available yet. I'm totally in favor of ending civilization's fossil fuel age; I just don't think it can happen in the blink of an eye.
So, that's what I meant when I said that we still need fossil fuels for a while.
We will need fossil fuels for a while, but right now there’s a glut of oil and it’s expected there will be a glut for some time.