The Corner

World

Oil and Venezuela

Venezuela’s President Nicolas Maduro (Marco Bello/Reuters)

Having become somewhat of a Chevron news junkie since covering the failed plot by scammers — Steven Donziger is now being formally investigated by the feds for his brazen criminal-RICO scheme — to cow the oil giant into becoming the Green Left’s ATM machine, your humble correspondent couldn’t help but raise an eyebrow over the news (well articulated and analyzed today by Steve Moore in a piece for Fox Business) that it, and any U.S. energy company operating in Venezuela, might be forced to leave the country and stop operations there.

So far, under its recent sanctions — which the Trump administration has announced will be intensified in hopes of expediting a break of the thuggish and socialist Maduro government — energy companies have been granted limited (90-day) exemptions that permit continued operations. They need to be continued. Per Moore:

Oil revenues are already down by about 70 percent since 2015 and rig counts are at a record low, due to sanctions and overall bureaucratic incompetence at the state-owned energy company. When the oil revenue stops flowing, the Maduro presidency will surely topple – if not sooner.

So the Trump sanctions are working and are supported by Juan Guaidó, the Venezuela president in waiting, as recognized by the United States. Stopping U.S. production in Venezuela could have short term foreign policy benefits, but in the longer run, securing a reliable U.S. commercial presence in this nation so close to home is of strategic benefit.

Companies like Chevron and Baker-Hughes have a decades-long presence in this now desperately poor country. They can be critical partners in the revival of the economy by helping ramp-up energy output and rebuild the infrastructure of the nation. The oil fields in Venezuela, if properly managed and developed, could match or exceed those of the Permian Basin in Texas.

Amazing, isn’t it, how a country so resource-blessed (Venezuela has the world’s largest oil reserves) can be so economically devastated. Yes, it’s amazing — if you are ignorant of the realities of socialism. Anyway, those reserves go a long way towards explaining why Russia and China and Cuba have placed men, materiel, and cash — much of it in loans tied to oil production — to prop up Maduro. In other words, their presence is nothing less than an energy foothold in South America, one that will remain if (when?) Maduro implodes.

Back to President Trump’s sanctions, and America’s long-term interests: They surely cannot include removing our presence (the big players are Chevron and Baker-Hughes) in Venezuela, in a sector so vital. Is the possible quicker overthrow of Maduro — if implemented by forbidding Chevron et al. to drill and pump — worth creating a scenario where Russia and China gain a major level of control of this strategic oil supply?

(That possible outcome brings to mind the scene in Goodfellas where the mobsters “help” the down-on-his-luck restaurant owner, bankrupting him by using the joint to fleece suppliers.)

Pray no. Under the previous level of sanctions, the Trump administration’s time-limited exemption is allowing U.S. oil companies to keep operating there, the reason surely being that it is in America’s clear national-security interest to do so. And it remains so. And it will surely be in the interests of a post-Maduro government to have America — and not Xi and Putin henchmen — helping restore this once-great nation’s economy via the production and selling of its at-hand, most-valuable asset.

Abandoning the field, literally, and all the infrastructure erected there by American companies, and seeing this investment and opportunity and resources handed over to Commies and crypto-Commies is a staggering thought. One can hope that the Trump administration will qualify its new total economic embargo by granting — again, and repeatedly, until Maduro resigns or is expelled (or maybe slips in the bathtub, one can pray) and a new democratic government takes hold — the exemption to energy companies operating in Venezuela. The plight of the Venezuelan people is very serious and very today, indeed, but the long term matters, and it demands that our sanctions see beyond the immediate. There’s too much at stake.

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