In the aftermath of the January raid to capture Nicolás Maduro, Donald Trump predicted a wave of new investment into Venezuela’s depleted oil sector. It has been slow in coming. After more than a decade of corrupt mismanagement, many existing oil wells are in disrepair and the infrastructure depleted — requiring huge outlays. The oil itself is difficult and expensive to extract.
But most of all, the world’s major oil companies are uneasy about the political situation. During the presidencies of Hugo Chávez and Maduro, the industry watched the economy being run into the ground and had some of its assets appropriated. Many executives do not believe that a government run by Delcy Rodríguez, who was Maduro’s vice-president, represents a big enough change to restore confidence.
Some deals may be starting to flow. Chevron on Wednesday committed to invest $7bn to more than double its Venezuelan production. But to speed the revival of Venezuela’s oil sector, Trump has two options. One would be to push for early elections that would usher in a democratically elected government. A new president could present a clean break with the past and negotiate major investments on the basis of genuine political legitimacy.