High Costs, High Risk Cloud Trump’s Venezuela Oil Pitch

U.S. President Donald Trump is giving U.S. energy companies the opportunity to revive Venezuela’s massive, derelict oil industry. It’s an offer they may want to refuse.

After the U.S. military’s ouster of Venezuelan President Nicolas Maduro at the weekend, representatives of the Trump administration plan to meet with oil executives later this week to discuss boosting Venezuelan oil production, Reuters reported on Monday.

Tapping Venezuela's vast oil reserves - the world's largest at over 300 billion barrels, or roughly one-fifth of the global stock – may be a tempting prospect for Exxon Mobil, Chevron and ConocoPhillips.

The potential to increase Venezuela's oil production is enormous. Following years of mismanagement and U.S. sanctions, the Latin American country’s production has slumped from a record of over 3.5 million barrels per day (bpd) in the 1970s, when it made up around 8% of global supplies, to below 1 million bpd last year, less than 1% of today's supply.

An opportunity approaching this scale has only been seen on a handful of occasions in recent decades, including following the collapse of the Soviet Union in the early 1990s, when Western oil majors scrambled to acquire cheap oil and gas assets, and after the fall of