President Donald Trump said Saturday that the United States will take control of Venezuela’s vast oil reserves and recruit American companies to invest billions of dollars to rebuild the country’s devastated oil industry.
According to the U.S. Energy Information Administration (EIA), Venezuela has huge oil reserves worth 303 billion barrels, which is about one-fifth of the world’s global reserves.
U.S.-led reforms could eventually make Venezuela a much larger oil supplier, creating opportunities for Western oil companies and a new source of production. And while the lower prices could inhibit oil production by some U.S. companies, they could also keep prices broadly in check.
Processing the type of oil that Venezuela currently uses (heavy, sour crude) requires special equipment and advanced technological capabilities.
The United States, the world’s largest oil producer, has a light, sweet crude oil that is good for making gasoline but not much else. Heavy, sour crude oil, like Venezuelan crude, is essential for certain products made in refining processes, such as diesel, asphalt, and fuel for factories and other heavy equipment.
Exploitation of Venezuelan oil could be particularly beneficial to the United States. Venezuela is nearby and its oil is relatively cheap.
Venezuela is the country with the largest proven oil reserves on earth, but its potential far exceeds its actual production. Venezuela’s crude oil production is only about 1 million barrels per day, which is about 0.8% of the world’s crude oil production.
International sanctions against the Venezuelan government and a severe economic crisis contributed to the decline of the country’s oil industry, but so did a lack of investment and maintenance, the EIA said.
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