Venezuelan oil recovery is a long-term quagmire
The thesis argued is that a rapid rebound in Venezuelan oil production is highly unlikely, making immediate bearish bets on crude prices or bullish bets on Gulf Coast refiners premature.
The argument
The guest argued that rebuilding Venezuela's severely neglected energy infrastructure, electrical grid, and ports will require $60 to $100 billion and take years. Additionally, resolving billions in outstanding debts to international companies and establishing political stability that outlives a single US presidential term are massive hurdles to attracting necessary capital.
The thesis, stress-tested
✓ What validates it
- ✓Settlement of outstanding arbitration debts with ConocoPhillips or ExxonMobil
- ✓Commitment of major capital expenditure packages exceeding $10 billion by US majors in Venezuela
▸ Risks discussed
- ▸US government guarantees or subsidized debt could accelerate development faster than market forces dictate
- ▸Chevron's existing footprint gives them a head start that might defy broader infrastructure delays
Hear it yourself
"Then you have to get by my estimate, to get half a million to a million barrels a day in the next five years, you've gotta spend somewhere between 60 and $100,000,000,000."
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