Is the West’s 100-Year Venezuela Oil Bet About To Backfire?
Centuries ago, the untamed jungles of Venezuela’s Orinoco Basin helped power the myth of El Dorado, a city made entirely of gold. But for the new adventurers staking a claim in the country’s black gold instead, there is no myth involved, but rather the world’s largest crude oil reserves of 303 billion barrels. The latest two firms to sign agreements in this black gold rush are the U.S.’s…
Centuries ago, the jungles of Venezuela's Orinoco Basin fueled the El Dorado myth of a gold city. Today, Venezuela boasts the world's largest crude oil reserves of 303 billion barrels, spurring a new oil rush. U.S. firm Halliburton and France's TotalEnergies are two of the latest companies to sign agreements to tap into this black gold.
Halliburton has signed two memorandums of understanding (MOUs) with Brazilian operator Eneva and engineering firm WESCA West-Construcciones. Halliburton aims to deploy its digital technologies and subsurface tools for field evaluation and development planning. Currently, only two active onshore drilling rigs operate in Venezuela, but Halliburton claims it has 15 rigs on standby, ready to resume work within a year.
TotalEnergies' deal includes Venezuela's light crude oil fields, which are often used to dilute extra-heavy crude grades. This marks a reversal of the company's previous stance on Venezuela. The U.S. government has taken over more than a fifth of Venezuela's oil reserves, including 65 billion barrels across 17 fields, in a deal signed by U.S. Energy Secretary Chris Wright on September 2.
This deal dwarfs the typical 20-to-30-year oil concessions. The 100-year concession length is unprecedented. A White House fact sheet states the deal is part of restoring American preeminence in the Western Hemisphere, expelling foreign adversaries, and ensuring American dominance in the region.
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