Hailing the US military operation to seize Nicol\u00e1s Maduro as spectacular, extraordinary and \u201can assault not seen since World War II\u201d, Donald Trump surprised many by making Venezuela\u2019s oil the central focus of his hour-long press conference on Saturday.<\/p>\n
The US president made little mention of the \u201cwar on drugs\u201d that for months had been his main justification for the military buildup and the strikes on boats that have killed 116 people, instead referring to oil more than a dozen times, even when questions made no reference to it.<\/p>\n
Trump\u2019s insistence ended up reinforcing a claim repeatedly made by Venezuela<\/a> since the escalation began: that he was ultimately seeking to topple Maduro and seize the country\u2019s vast natural reserves.<\/p>\n As he did weeks earlier when announcing a \u201ctotal blockade\u201d of sanctioned oil tankers, Trump said Venezuela, which holds the world\u2019s largest reserves, had \u201cstolen\u201d oil from the US and that it would now be taken back.<\/p>\n \u201cWe built Venezuela\u2019s oil industry with American talent, drive and skill, and the socialist regime stole it from us during those previous administrations. And they stole it through force. This constituted one of the largest thefts of American property in the history of our country,\u201d Trump said, echoing almost word for word a post on X<\/a> by his homeland security adviser, Stephen Miller, in mid-December.<\/p>\n Analysts can trace the origins of Trump\u2019s claim \u2013 decisions by previous Venezuelan governments to nationalise production \u2013 but they argue that the US has no legal claim to Venezuela\u2019s oil.<\/p>\n Jos\u00e9 Ignacio Hern\u00e1ndez, a legal scholar and researcher of Venezuela\u2019s oil industry who works with the consultancy Aurora Macro Strategies, said: \u201cEven if a past government illegitimately expropriated the oil assets of US companies without fair compensation, Venezuela did not steal any oil from the US.\u201d<\/p>\n Other analysts note<\/a> that US companies never owned the oil or the land in Venezuela. They held exploration concessions, which confer temporary operating rights, not permanent ownership. Under international law and the UN principle of permanent sovereignty over natural resources established in 1962, sovereign states have the inherent right to control and dispose of resources within their territory.<\/p>\n US companies have drilled for oil in Venezuela since the early 1900s, and over the past century, firms from other countries joined them, including Italy, France, Spain, China, Russia, the Netherlands and the UK.<\/p>\n In 1943, Venezuela mandated that 50% of profits go to the state, and in 1976 the centre-left president Carlos Andr\u00e9s P\u00e9rez nationalised the industry, creating the state-owned Petr\u00f3leos de Venezuela SA (PDVSA).<\/p>\n US companies such as Exxon and Mobil, which merged in 1999, and Gulf Oil, now part of Chevron<\/a>, suffered losses estimated at $5bn but were compensated to the tune of about $1bn each.<\/p>\n Maduro\u2019s predecessor and mentor, Hugo Ch\u00e1vez, took control of the remaining oil operations still run under private arrangements in 2007. ExxonMobil<\/a> and ConocoPhillips rejected the new contractual terms and had their assets expropriated. Chevron agreed to remain.<\/p>\n Francisco J Monaldi, the director of the Latin America energy programme at Rice University\u2019s Baker institute for public policy, said: \u201cConocoPhillips and ExxonMobil left, went into international arbitration and won. In the case of ConocoPhillips, they are still owed more than $10bn. So the company is likely to be a key actor in any negotiation to recover that money, probably in part by returning to the country.\u201d<\/p>\n Returning, however, is far from straightforward.<\/p>\n Analysts point out that there has never been an independent audit, made impossible by years of Chavista authoritarianism, to establish precisely how large Venezuela\u2019s reserves are. After years of mismanagement and corruption under Ch\u00e1vez and Maduro, compounded by severe damage from US sanctions, Venezuela\u2019s oil production also falls far short of its potential. Moreover, much of its reserves are \u201cheavy sour\u201d crude, which is harder and more expensive to extract.<\/p>\n The country is now a marginal player, accounting for less than 1% of global production. Monaldi estimates that Venezuela\u2019s current output of just under 1m barrels a day could rise to 4m or even 5m \u2013 but doing so would require about $100bn in investment and at least a decade.<\/p>\n \u201cI\u2019m not sure whether they [US companies] will be willing to go back,\u201d he said.<\/p>\n Despite Trump\u2019s claims of oil \u201ctheft\u201d, Chevron still holds about 25% of operations in Venezuela. PDVSA controls roughly 50%, with about 10% in joint ventures led by China, another 10% by Russia and 5% by European companies.<\/p>\n During Trump\u2019s first term, the US imposed sanctions banning imports of Venezuelan oil. Joe Biden eased those restrictions in the hope that Maduro would allow a democratic transition after Venezuela\u2019s 2024 election. That election is now widely believed to have been stolen and Trump has reinstated the sanctions. Some analysts argue that the sanctions contributed to preventing Venezuela<\/a> from paying compensation owed to ExxonMobil and ConocoPhillips.<\/p>\n Even during sanctions, Chevron never fully suspended its operations, maintaining them at sharply reduced levels. Trump briefly revoked the company\u2019s licence but reversed course in July, ordering that royalties be used not by Maduro\u2019s government but to cover operating costs and pay down Venezuela\u2019s long-standing debt to the company.<\/p>\n \u201cIf a transition of power is consolidated and sanctions are lifted, the company that will benefit most is Chevron because it is already on the ground,\u201d Monaldi said. \u201cBut that will require substantial investment, because the Venezuelan state companies are effectively broken and have very limited capacity at this point.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Hailing the US military operation to seize Nicol\u00e1s Maduro as spectacular, extraordinary and \u201can assault not seen since…\n","protected":false},"author":2,"featured_media":352001,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-352000","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/352000","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=352000"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/352000\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/352001"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=352000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=352000"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=352000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}