The Trump administration outlined its plans for Venezuelan oil.
In a fact sheet published on its website, the Department of Energy stated it will begin moving oil from Venezuela, controlling the proceeds of oil sales. The Department is partially removing sanctions and working with private industry to rebuild the dilapidated oil infrastructure within the country. Energy Secretary Chris Wright also outlined the Administration's plans in an interview Wednesday.
"We have engaged the world’s leading commodity marketers and key banks to execute and provide financial support for these crude oil and crude products sales," the release said.
According to the release, all proceeds from oil sales will go into accounts at globally-recognized banks, which are controlled by the United States, in order to ensure the funds are legitimate. Those funds will then be disbursed at the discretion of the U.S. government. The oil sales will begin with the 30-50 million barrels, and continue indefinitely.
Furthermore, the oil itself will only be shipped in and out of the country by authorized channels in accordance with U.S. policy; though the United States is rolling back some sanctions to open up global markets.
"This is the crude that's backed up in onshore storage and that's in offshore floating storage," the Secretary of Energy said. "We're going to market the crude coming out of Venezuela first, this backed-up stored oil, and then indefinitely going forward, we will sell the production that comes out of Venezuela into the marketplace. We will have U.S. as the supplier of diluent that's got to go down there to enable that production. We're going to have that flowing again ... The resources are immense. This should be a wealthy, prosperous, peaceful energy powerhouse. That's the plan."
The medium-to-long-term goal is to revitalize the industry and make use of Venezuela's tremendous resources. Wright pointed out that at its peak, Venezuela was producing around 3.7 million barrels of oil per day. Once dictator Hugo Chavez came to power, production fell off, and currently sits at around 800-900,000 barrels per day. Wright estimated that oil producers could bump production by a few hundred thousand barrels per day simply by deploying a few crews and some spare parts to fix some of the broken infrastructure. Over the long-term, bringing production back to its historic levels will require billions of dollars in investment and favorable conditions, but Wright said he is working with major players to help create those conditions.
The United States is also investing in rebuilding the Venezuelan electrical grid, which has seen a 30 percent decrease in production over a similar time frame.
Ultimately, the United States having control over the Venezuelan oil industry advances national security and economic interests while also giving them the leverage to drive radical change for the benefit of the Venezuelan people.
"We need to have that leverage and that control of those oil sales to drive the changes that simply must happen in Venezuela, so it's no longer a drug threat, a kidnapping threat, a gun-running threat, an enabler of our adversaries in our hemisphere," said Wright.
"Venezuela has been a train wreck for the United States and the American people. And under President Trump's leadership, we're all in to change that and restore it to a much better situation that not only will benefit the American people, the American economy, and global energy markets, but of course, it also massively benefits the people of Venezuela. Eight million Venezuelans fled. Let's make a society people want to go back to, invest in, and grow."