Venezuelan oil reserves: No quick fixes

Even if U.S. Oil Majors invest the billions that President Donald Trump announced just hours after he took office, Venezuela's crude production is unlikely to increase significantly for many years.

Venezuela may have the largest oil reserves in the world, but its production has dropped?over the last decade due to a lack investment by foreign firms. In the 2000s Venezuela nationalized oil operations that included?assets? of Exxon Mobil & ConocoPhillips.

Analysts warned that companies who might invest in Venezuela would have to contend with issues such as security, infrastructure and legality, in addition to the possibility of long-term political instability.

Mark Christian, Director of Business Development at CHRIS Well Consulting, stated that American companies won't return to the country until they are sure of being paid and have a minimum amount of security. Mark Christian, director of business development at CHRIS Well Consulting, said that the firms would not return until the sanctions against the country were lifted.

Venezuela will also need to reform its legislation to allow more foreign investment. Venezuela nationalized the oil industry in 1970s and ordered forced migration in 2000s to joint ventures under the control of its state-owned oil company PDVSA. Chevron was one of the companies that negotiated a migration and exit, but most other companies did not reach an agreement and filed for arbitration.

There are many things that could go wrong

Thomas O'Donnell is an energy and geopolitical analyst. He said that if Trump et al. can produce a peace transition with little opposition, there will be a significant increase in oil production in 5 to 7 years, as infrastructure is repaired and investment is sorted out.

It would depend on a lot of things going well.

"A botched transitional political process that creates a sense of U.S. supremacy can lead to years and years of resistance," by armed citizen groups?and guerrillas groups operating in the country.

Chevron is positioned well to profit from any oil openings in Venezuela.

Francisco Monaldi is the director of Rice University's Baker Institute, Houston. He oversees the Latin America Energy Program.

He added that other U.S. companies will pay close attention to the political stability, and wait to see what happens with operational conditions and contract frameworks.

Monaldi stated that Conoco is likely to be the company most interested in returning, as they owe more than $10 billion and are unlikely to get paid without returning. Exxon is also a possibility, although it's not owed nearly as much, according to Monaldi.

ConocoPhillips monitors developments in Venezuela, and their possible implications for global energy security and stability. In an emailed statement, a spokesperson for the company said that it would be "premature" to speculate about future business or investment activities.

Chevron exports 150,000 barrels per day of Venezuelan crude oil to the U.S. Gulf Coast. The company has been working closely with the Trump Administration to ensure its continued presence in Venezuela over the past year.

In December, CEO Mike Wirth stated that he spoke with the Trump Administration about the importance of maintaining a presence by Americans in the country throughout multiple political cycles.

The oil company has been operating in Venezuela for more than 100 years. On Saturday, it said that its main focus is on the safety of its workers and the integrity of their assets.

In an email response, a Chevron representative said: "We continue to comply with all applicable laws and regulations."

Exxon didn't immediately answer questions.

Ed Hirs is an energy fellow from the University of Houston. He said that the recent events in Venezuela will have little effect on U.S. oil and gasoline prices, as most of Venezuela's production goes to Cuba and China. He said there are many examples of American companies' recent trips that have not produced notable results.

Trump has now joined the list of U.S. Presidents who have thrown out regimes in other countries. Bush with Iraq. Obama and Libya The United States received no benefit from oil in those cases. Hirs stated, "I'm afraid the history of Venezuela will repeat itself."

Chevron oil tankers were among the few that left Venezuela in the last month following Trump's announcement of "

blockade

The country has exported "of sanctioned tanks entering and leaving the nation. The country exported

(source: Reuters)