I believe that the oil industry has been lobbying on this for a long time, and they’ve said as much outside of this immediate context. One of the things they do a lot around Trump is publicly protest too much and say, “Trump is pushing for deregulation, but that’s not what we are interested in.” They say in the media, “Just because Trump wants us to produce more doesn’t mean we’re going to.”
If the greatest lie the devil ever told was to convince us that he wasn’t real, the greatest lie the oil industry ever told us is to convince us that they don’t want oil. Where do we even begin to think about that as possible? They want to control when they produce it and how, and under what terms. They need to show a growing amount of oil that they can count as their reserves.
There are very few big pots of oil left sitting around anywhere unclaimed. The only way to get that is to increase technology, go into very expensive, technologically complex modes of production that face a lot of resistance. Venezuela is a country that [the big oil companies] were producing in not that long ago and making money in not that long ago and have wanted to get back into but on their own terms.
So I think when they protest publicly, one, it’s to distance themselves from Trump’s extremism, but two, it’s a great public negotiating tactic. They’re basically saying publicly, and the media is repeating it, “We wouldn’t want to operate in Venezuela. Oh, my God, it’s expensive, it’s technologically complex.” I actually think those are ridiculous things if you look where else they operate.
It helps their negotiating position with Venezuela, because ultimately, what this is about is: Will there be terms that will make it worth their while to go to Venezuela, and can those trust that those terms will carry into the future? Things like the cost of starting up Venezuela production, which is something that gets cited a lot.
Exxon was producing in Venezuela. So was ConocoPhillips. So was Chevron. When the Chavez regime changed the terms and took greater state control, Chevron accepted those terms. Exxon and ConocoPhillips did not. Exxon and ConocoPhillips operations were then expropriated by the Venezuelans. Exxon and ConocoPhillips believe that they are owed money, and my guess is that part of what’s being negotiated is the billions of dollars that they believe that they are owed, and then can they come back in under terms that they can trust and are favorable to them?
They [also] want greater access. Exxon is also operating in waters offshore Guyana that Venezuela and Maduro claim as theirs. Maduro has even sent military gunboats in to threaten Exxon. Marco Rubio was in Guyana in March and said we will defend Exxon from Maduro. This is a massive new production that Exxon started from scratch and has hardly cost them a penny, because Guyana is fronting the bill.
That’s what happens: the promise of production in the future entices governments to front-end the expenses for the wealthiest oil companies in the world at the start. Chevron has already said that they hope to help guide the development of the new era of Venezuela’s oil production.
This is all a negotiation. Now Chevron bought their way into offshore Guyana. [Oil companies are] also interested in offshore Trinidad and Tobago. They’re also interested in offshore Suriname. This is just one big pot of oil and gas. And what Trump has accomplished at the barrel of a gun is opening that door.
I think one of the things that the media has to be really careful with is not buying what the industry is spinning.