Some of the biggest international oil trading houses, including Trafigura Group, will discuss with the U.S. Administration returning to oil trade with Venezuela, the global head of Trafigura’s oil division, Ben Luckock, told Bloomberg television in an interview on Tuesday.
The capture of Nicolas Maduro opens the door to U.S. and other Western firms to consider investments in Venezuela’s industry, and to the top trading houses to seek a return to trading Venezuela’s crude and delivering fuels to the country sitting on 17% of the world’s proven oil reserves.
U.S. President Donald Trump and the U.S. Administration have already signaled they expect huge interest from Western firms to do business in Venezuela.
“It’s the topic everyone’s discussing in the oil industry,” Luckock told Bloomberg television today.
“I think everyone is looking at what opportunities there may be in Venezuela.”
Most traders have in the past worked with Venezuela and its state oil firm PDVSA in selling Venezuelan crude and delivering gasoline and naphtha to Venezuela.
Trafigura specifically would need to see a “proper legal framework” before considering a return to Venezuela, Luckock told Bloomberg.
The trader has “ongoing discussions with this administration and other governments about what’s required,” the executive added.
According to Luckock, “It’s very clear the US government wants the oil to continue to flow.”
“They don’t want civil unrest in Venezuela and want gasoline and diesel to enter the country and we’re well placed to assist if in fact that’s what’s required.”
Returning Venezuela’s oil production to the 1970s peak of 3.5 million barrels per day (bpd), more than triple the current output of about 1 million bpd, would need $10 billion in annual investment from U.S. oil majors over the next decade, or a total of $100 billion, Francisco Monaldi, director of Latin American energy policy at Rice University’s Baker Institute for Public Policy, told Bloomberg earlier this week.
By Charles Kennedy for Oilprice.com
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