Caracas
\nThe US needs to control Venezuela\u2019s oil sales and revenue indefinitely to stabilise that country\u2019s economy, rebuild its oil sector and ensure it acts in America\u2019s interests, top US officials said on Wednesday.
\nThe comments reflect the importance of crude oil to US President Donald Trump\u2019s strategy in Venezuela after US forces abducted and deposed the country\u2019s leader, Nicolas Maduro, in a raid on the capital Caracas on Saturday.
\n\u201cWe need to have that leverage and that control of those oil sales to drive the changes that simply must happen in Venezuela,\u201d US Energy Secretary Chris Wright said at the Goldman Sachs Energy, CleanTech & Utilities Conference in Miami.
\nHe said the revenues would be used to stabilise Venezuela\u2019s economy and eventually to repay oil majors Exxon Mobil and ConocoPhillips for losses when their assets were nationalised by former president Hugo Chavez nearly two decades ago.
\nUS Vice President JD Vance said that controlling Venezuela\u2019s oil meant controlling the country.
\n\u201cWe control the energy resources, and we tell the regime: \u2018You\u2018re allowed to sell the oil so long as you serve America\u2018s national interest; you\u2018re not allowed to sell it if you can\u2018t serve America\u2018s national interest,\u201d he told media.
\n\u201cAnd that\u2019s how we exert incredible pressure on that country without wasting a single American life, without endangering a single American citizen,\u201d he said.
\nDemocratic lawmakers criticised this approach, which Connecticut Senator Chris Murphy equated to stealing Venezuela\u2019s oil at gunpoint, while industry analysts warned about political instability as the country treads a fine line between denouncing Maduro\u2019s abduction and appeasing the US.
\nThe OPEC member nation sits atop the world\u2019s largest oil reserves but accounts for only about one per cent of global supply after decades of underinvestment eroded production.<\/p>\n
Stored oil moving to market first
\nUS Energy Secretary Wright said the US would market stored Venezuelan oil first and then sell ongoing future production indefinitely with revenues deposited into accounts controlled by the US government.
\nSuch sales already have begun and the US has engaged \u201cthe world\u2019s leading commodity marketers and key banks\u201d to execute and provide financial support for them, according to a statement from the US Department of Energy.
\nWright added he was speaking to US oil companies to learn what conditions would enable them to enter Venezuela to help boost the country\u2019s production in the longer term.
\n\u201cThe resources are immense. This should be a wealthy, prosperous, peaceful energy powerhouse,\u201d he said.
\nOn Tuesday, Washington announced a deal with Caracas to initially export up to $2 billion worth of Venezuelan crude to the United States, a sign the government of interim Venezuelan President Delcy Rodriguez is responding to Trump\u2019s demand that it open up to US oil companies or risk more military intervention.
\nTrump said on Wednesday in a post on Truth Social that Venezuela has agreed to use the proceeds from the sale of its oil to purchase American-made goods.
\n\u201cA wise choice, and a very good thing for the people of Venezuela, and the United States,\u201d he wrote.
\nVenezuela\u2019s state-run oil company PDVSA said it was progressing in negotiations with the United States for oil sales. PDVSA board member Wills Rangel told Reuters the US will need to buy cargoes at fair market prices.
\nShares of US refiners Marathon Petroleum, Phillips 66 and Valero Energy were up between 2.5pc and 5pc.<\/p>\n
White House meetings
\nTrump is scheduled to meet with the heads of major oil companies at the White House on Friday to discuss ways of raising Venezuela\u2019s oil production.
\nRepresentatives from Exxon Mobil, ConocoPhillips and Chevron \u2014 the top three US oil companies \u2014 would be present, according to a source familiar with the planning.
\nChevron Vice Chairman Mark Nelson will represent that company at the meeting, another source said.
\nThe companies, all of which have experience in Venezuela, have declined to comment.
\nWright said in an interview with CNBC on Wednesday afternoon that he spoke with the CEOs of all three companies immediately after Maduro was seized, and expected them to be engaged in rehabilitating Venezuela\u2019s oil sector.
\n\u201cAre they going to put billions of dollars into building new infrastructure in Venezuela next week? Of course not,\u201d he said. \u201cBut they want to be productive advisers and helpers in that process.\u201d
\nWright also told CNBC that some of the proceeds from Venezuelan oil sales could eventually be used to repay ConocoPhillips and Exxon Mobil for losses when they exited the country, but only after Venezuela\u2019s economy is stabilized.
\nChevron is the only US oil major still operating in Venezuela\u2019s oil fields.
\nVenezuela was producing as much as 3.5 million barrels per day in the 1970s. But mismanagement and limited foreign investment have since led to a huge drop in annual production, which averaged about 1.1 million bpd last year.
\nWright said he believed Venezuelan production could be increased within a short period with an infusion of equipment and technology, but that a bigger recovery to past production levels would take years.<\/p>\n","protected":false},"excerpt":{"rendered":"
Caracas The US needs to control Venezuela\u2019s oil sales and revenue indefinitely to stabilise that country\u2019s economy, rebuild its oil sector and ensure it acts in America\u2019s interests, top US officials said on Wednesday. The comments reflect the importance of crude oil to US President Donald Trump\u2019s strategy in Venezuela after US forces abducted and […]<\/p>\n","protected":false},"author":2,"featured_media":524548,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-524517","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n