Donald Trump has announced plans to tap into Venezuela’s oil reserves following the capture of President Nicolás Maduro. He stated that the US would temporarily “run” the country until a “safe” transition occurs. Trump wants American oil companies to invest billions into Venezuela to develop its largely untapped oil resources.
The US president emphasized that these companies would repair Venezuela’s “badly broken” oil infrastructure and begin generating revenue for the nation. However, experts caution that this plan faces enormous hurdles. Restoring Venezuela’s oil production could cost billions and take up to a decade before delivering significant results.
Venezuela is believed to hold around 303 billion barrels of proven oil reserves, the largest in the world. Despite this, current oil production is minimal compared to its potential. Production has steadily declined since the early 2000s, as former President Hugo Chavez and the Maduro administration tightened control over the state-run oil company PDVSA. This led to the departure of many skilled workers.
While some Western companies, including the US-based Chevron, continue to operate in Venezuela, their activities have been greatly reduced. This is partly due to US sanctions, which have limited the country’s access to critical investments and equipment.
“The real challenge is the infrastructure,” said Callum Macpherson, head of commodities at Investec. Many parts of the supply chain have been looted or dismantled.
In November, Venezuela produced about 860,000 barrels per day, according to the International Energy Agency. This is only a third of what the country produced ten years ago and represents less than 1% of global oil consumption.
Most of Venezuela’s oil is classified as “heavy, sour” crude. This type is harder to refine but is useful for diesel and asphalt production. In contrast, the US mainly produces “light, sweet” oil, which is ideal for gasoline.
