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President Donald Trump speaks to Venezuelan Americans at Florida International University in Miami on Feb. 18, 2019.<\/span>Andrew Harnik\/AP<\/span><\/p>\n<\/div>\n The Trump administration<\/span> announced an arrangement with Venezuela last week that would see the US take control of 65 billion barrels worth of oil fields and a significant share of the country\u2019s production of 800,000 barrels of oil per day<\/a>\u2014the latest development after an American strike on Caracas abducted the country\u2019s president<\/a> Nicol\u00e1s Maduro in January.<\/p>\n According to the White House statement<\/a>, Venezuela will grant a firm called North American Blue Energy Partners, rights to 17 oil fields for 100 years; that company will give the Pentagon a 35 percent stake in its corporate parent and the State Department the ability to buy 20 percent of its oil, with right of first refusal for the remaining 80 percent. The US government can also veto any appointment to NABEP\u2019s board of directors.<\/p>\n The deal is one of the public-private partnerships that have become<\/a> customary<\/a> in Donald Trump\u2019s foreign relations. But its workings in practice, and diplomatic and corporate reactions to the deal, are unclear at best. Just days after the White House announcement, Chevron said it would expand its operations<\/a> in Venezuela. But Chevron is already the largest foreign oil operator in the country, and others have indicated<\/a> that the uncertainty of Trump\u2019s plan, let alone how long the process of scaling up production would take, has made them hesitant to invest.<\/p>\n What is clear <\/strong>is that the oil deal is a direct seizure of another country\u2019s resources under threat of force, what political scientist Jeff Colgan, who directs the Climate Solutions Lab at Brown University\u2019s Watson Institute for Public and International Affairs, calls \u201cpetro-imperialism<\/a>.\u201d<\/p>\n \u201cWe should be watching to see whether Trump\u2019s own family takes a piece of this thing, as [they] have with so many other foreign business arrangements.\u201d\u00a0<\/p>\n<\/blockquote>\n<\/figure>\n In March, I spoke with Colgan<\/a>, who has long<\/a> studied<\/a> the role of oil in international politics and war about how the idea of military intervention in global oil markets to support the US oil industry informed Trump\u2019s actions in Iran. A similar pattern is in evidence again in Venezuela.<\/p>\n Trump has publicly signaled that he is interested in making Venezuela the 51st state<\/a>, and according to reports<\/a> Tuesday, is seeking more access to the country\u2019s minerals, including gold. To better understand what to make of all of this, I spoke with Colgan again last week.<\/p>\n Much isn\u2019t known about Trump\u2019s agreement to secure partial control of Venezuela\u2019s oil industry. What are you watching out for? <\/strong><\/p>\n I\u2019m keeping an eye on the different ways the Venezuelan government and the US government are describing the deal, because of course, their two audiences want very different things, and I\u2019m not sure how easy it\u2019s going to be for politicians to try to square that circle. <\/p>\n Already, you see significant criticism from the political opposition in Venezuela [led by officials like conservative Mar\u00eda Corina Machado<\/a>], and even from some of the old [Nicol\u00e1s] Maduro regime<\/a> members saying, \u201cThis oil is ours, we don\u2019t want to give it to the United States, and this is a form of neo-colonialism.\u201d\u00a0<\/p>\n There\u2019s also criticism of the interim president in Venezuela [Delcy Rodr\u00edguez] for making this deal. She, of course, is trying to finesse that<\/a> by saying, \u201cLook, this is an arrangement that will bring in American investment into an oil sector that really needs it,\u201d because [Venezuela\u2019s oil industry] has been inefficiently run<\/a> for 20 years or so. It is true on some level, but American dollars going into the Venezuelan oil sector is different from what President Trump is telling Americans\u2014that this is going to be a great deal by which Americans get access to Venezuelan oil at zero cost to American taxpayers<\/a>. Those two messages seem fundamentally incompatible.<\/p>\n The Trump administration claims that Venezuelan oil<\/strong> will lower American gas prices<\/strong><\/a> amid the war in Iran. What do you think? <\/strong><\/p>\n I think the argument is complete nonsense. Yes, there might be new investment that comes in, but then you\u2019re really talking about production that is years down the road. And because the oil system is very globally integrated, what happens in Venezuela is not going to lead in a direct fashion to lower prices for Americans. In fact, if anything, more investment in Venezuela might drive out investment in the rest of the world as companies react to wherever they think is the most profitable approach to meeting oil demand. They can cancel or just not make investments elsewhere in the world.\u00a0<\/p>\n The disruption in [the Strait of] Hormuz is going to affect oil prices in the next few years<\/a>, well before any new Venezuelan production.<\/p>\n Are there any historical comparisons to what we know about the Trump administration\u2019s oil deal? I know a British company owned a lot of Iran\u2019s oil sector before Iran nationalized it<\/strong> in the 1950s<\/strong><\/a>.<\/strong><\/p>\n I think the comparison to Iran is a good one. The Anglo-Iranian oil company, which today we know as BP<\/a>, did control the Iranian oil sector and made all the decisions about it from London rather than on behalf of Iranians. That\u2019s one of the reasons, of course, why you had [Mohammad] Mosaddegh get elected [as prime minister of Iran] in 1951 and a coup against him in 1953<\/a> as he tried to nationalize the oil sector, and that continues to be a grievance that Iranians feel against both Britain and the United States as evil overlords of their oil sector.<\/p>\n The winner is \u201cnot going to be the average American consumer, certainly not the average Venezuelan. But it is going to line the pockets of some American companies.\u201d<\/p>\n<\/blockquote>\n<\/figure>\n Another is PDVSA<\/a>, the Venezuelan national oil company that was created out of mostly American oil companies. It used to be Exxon, Mobil, [what is now] Chevron, [and others]. These companies were operating Venezuela\u2019s oil sector until, in 1976<\/a>, the government nationalized them, saying \u201cokay, everybody who\u2019s currently working for those companies: now you\u2019re working for PDVSA.\u201d And they showed up to the same office the same the next day doing the same job, just for a different company.\u00a0<\/p>\n It very much was an American institution. It was nationalised, and since the \u201970s, Venezuela has tried to close the sector off and concentrate the profits of the oil sector in Venezuela. That only works for so long, and they need more foreign investment. So then they open the sector back up and close it again every 10 or 15 years<\/a>.\u00a0<\/p>\n Now we\u2019re in a new phase of [Venezuela] needing foreign investment to reinvigorate their oil sector. But there are good and bad ways of doing this, and this is one that is very likely to be seen by Venezuelans as just Americans stealing Venezuelan oil. I think it would be hard to shape that perception because of the way that Maduro was taken out<\/a> of the country and also because you have President Trump saying how this [deal] is acquiring all of these resources for America.<\/p>\n Is there anything else that jumps out to you in recent reporting on what the Trump administration is saying about the deal?<\/strong><\/p>\n All of the relevant actors are aware that this is fundamentally political\u2014that Trump wants to make a case that he is generating economic returns for America, and the best argument he\u2019s going to be able to make is that those returns are coming in the future. There\u2019s certainly not going to be any impact before the November elections, or even, frankly, the 2028 elections.\u00a0<\/p>\n The other main thing here is a story about who benefits. It\u2019s not going to be the average American consumer, and it\u2019s certainly not going to be the average Venezuelan. But it is going to line the pockets of some American companies, and in particular, we should be watching to see whether Trump\u2019s own family takes a piece of this thing, as he and his family have with so many<\/a> other<\/a> foreign business arrangements.\u00a0<\/p>\n I continue to go back to this framing of \u201cpetro-imperialism<\/a>,\u201d where the US is turning its foreign policy in this new direction<\/a> to extract resources and profits away from other countries in an old-fashioned, 19th-century imperialist mode. This is what this Venezuelan deal is doing.\u00a0<\/p>\n Based on the limited information we have now, how is the Venezuela deal different from other iterations of Trump\u2019s petro-imperialism, like Iran?<\/strong><\/p>\n Iran is very different because the US has not been able to acquire any of Iran\u2019s oil resources. But in the early parts of the war, he did say before the new supreme leader had been chosen that the United States should have a say<\/a> in who that person is [like Delcy Rodr\u00edguez<\/a> in<\/a> Venezuela<\/a>]. [It\u2019s] very much the same kind of petro-imperialistic thinking, where he wants to be able to control what another oil producer was doing.\u00a0<\/p>\n But it hasn\u2019t worked. Iran has found a way to fight back<\/a>, and the idea that the US is going to dictate who\u2019s in charge of the Iranian government is completely off the table. That\u2019s just not feasible, and the Trump administration would be very lucky<\/a> to get back to the pre-war status quo in Iran, which I don\u2019t think is going to happen.<\/p>\n<\/p><\/div>\n\n
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