Venezuela oil recovery will take years
The guest argued that despite political changes and US pressure, rebuilding Venezuela's oil production to add 1 million barrels per day will take three to five years and require over $50 billion in investment.
The argument
Johnston agreed with analyst Anas Alhajji that rapid growth is unrealistic due to a rotted domestic infrastructure, an unreliable power grid, and a lack of contract law. While some quick wins of 200,000 to 300,000 barrels per day are possible via Chevron, major players like Exxon view the country as currently uninvestable.
The thesis, stress-tested
✓ What validates it
- ✓WCS heavy crude differentials at Houston widening further beyond $8 per barrel
- ✓Exxon or other major US operators officially announcing new capital expenditure plans in Venezuela
▸ Risks discussed
- ▸US government direct subsidies or unprecedented security guarantees could accelerate private capital deployment
- ▸Chevron successfully squeezing higher-than-expected volumes out of existing joint ventures in the near term
Hear it yourself
"Well, suddenly, if Trump claims that, you know, Venezuela has, quote, turned over 30 to 50,000,000 barrels, that is roughly market prices, two and a half billion barrels."
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