The relationship between the United States and Venezuela has been a roller coaster, and oil has always been at the center of it.
Not so long ago, the Trump administration was happy to pass up Venezuelan oil, but now it appears to be a priority for U.S. strategic interests. Concerns extend to the protracted economic crisis raging in Venezuela and the resulting exodus of citizens. To manage vast reserves of minerals and fossil fuels alike. Conflict with China, Russia, and Iran.
The first step the Biden administration took to ease sanctions against Venezuela was to authorize the creation of a Humanitarian Fund, which did not materialize, first through Chevron CVX only and then through a general license. Approved for purchasing crude oil.
Now, the White House is threatening to re-sanction Venezuelan oil unless Caracas accedes to its demands for political guarantees in upcoming elections. Closer ties are under strain as this article is published.
However, even if the US government decides to cancel GL 44, it seems unlikely to revoke the special licenses for Chevron and European energy giants (including Shell, Repsol, Eni and Morel et Prom). this place.
I wanted to know the relevance of Venezuelan oil, so I looked around for good sources who would talk about the record. In this industry, and in this country, many people prefer to speak on condition of anonymity.
Reynaldo Quintero was recommended. He will be speaking as chairman of the oil business association PETROPYMI. He also runs his Argos Energy Services and is VEPICA’s Vice President of Business Development.he was the president of camara petrella, major field associations. I thought he must know something.
VEPICA serves oil operations in Venezuela and abroad. The company works with domestic European and Asian energy companies, and there are rumors that they met with “American wildcat entrepreneurs,” although that’s not what you ask or write about.
I visited Quintero at the VEPICA office south of Caracas. “We have been involved in projects that span continents,” Quintero told me, showing me a world map. One of his latest examples is Refineria di Korsu in Curacao, which provides engineering services.
“You know, oil is 90 percent geopolitics,” was one of the first things Quintero said to me as I sat in his office. The US election, wars in Ukraine and the Middle East will all have a major impact on this oil-dependent nation.
Especially in Venezuela, which boasts the world’s largest reserves at 303 billion barrels, the type of crude oil found in the region is important.
talk about crude oil
“Venezuela primarily has heavy and extra-heavy crude oil available. It’s not very useful as is, but it’s very useful when blended. Gulf Coast refiners use a process called coking, so they were built for that purpose. For example, Citgo,” Quintero explained, referring to the refinery acquired by the Venezuelan state in the late 1980s.
Venezuela also has light and medium crude oil, he says, and “the Zuria region in the west has 22 billion barrels of that quality alone.” This is higher than Brazil, Guyana and Colombia. The same is true for eastern Monagas and the Anzoategui Basin. Importantly, there are also heavy crude oils and extra-heavy crude oils. ”
Venezuela’s special varieties lend themselves to blending and meet the demands of refineries across the Gulf Coast, as well as Africa, the Middle East and North America.
“Coking cannot use crude oil and requires a specific diet. Lighter varieties, for example shale oil, are not compatible. Coking is a more complex process that requires large investments, but the final You end up with a better end product.”
“2019 oil sanctions prevented Gulf Coast refiners from buying Venezuelan crude, so they had to look for producers further afield. Then shipments arrived from Russia, Iran, Nigeria and elsewhere. But now we are having problems with other suppliers as well,” he says. There are rumors that the Russians will also buy Venezuelan oil, rebrand it and resell it to the US until they are sanctioned.
I ask him about the relationship between Caracas and Tehran. Amid its worst humanitarian crisis, Venezuela waited in despair for an oil shipment from Iran to arrive. They were also targeted by the Trump administration as part of the economic blockade. At the time, many people were perplexed. Why is there a gasoline shortage in an oil-rich country?
“At that time, Iranian shipments with light crude oil were essential. Otherwise, we would be saddled with heavy crude oil that would be useless on its own,” I told him, adding that Iran, Venezuela, Russia and others were colluding. He said that many people believe in the existence of an anti-American axis. . “In many ways, we are competitors, and each of us has oil and gas to sell.”
Most Venezuelans feel cultural kinship and would like to normalize relations with the United States. It was common for the upper class to fly there for business or pleasure. Many Venezuelans from all sectors of society now have family in North America and Western Europe.
The arrival of necessary inputs for Venezuela’s oil sector, including naphtha, is part of an agreement signed with European companies aiming to extract fossil fuels from Venezuela.
Quintero shows me around the office building. There are four floors with desks, but only two are in use. “Before, he had 500 staff just in this building, now he only has 300 across the country. We’ve been waiting for the right moment all along.”
I would also like to ask Quintero about the tension with Guyana over the Essequibo territory. January 25thththe foreign ministers of Venezuela and Guyana met in Brasilia, along with representatives of CARICOM and the United Nations.
The two South American countries have been at war over territory since 2019.th Century resurfaced at the end of last year. A key consideration is the 11 billion barrels of oil discovered in disputed waters controlled by Guyana.
On my way to VEPICA’s headquarters, I heard the spot on the radio. They talk about General Domingo Antonio Sifontes, who in 1919 pushed back settlers from British Guyana who tried to settle in eastern Venezuela.th century. Amid today’s tensions, Sifontes’ name is being saved, and his remains were moved to the National Pantheon in Caracas earlier this month.
“The United States used to get 1 million barrels a day from Venezuela. Now we’re both pretty much on the same page, so sanctions weren’t that big of an issue at first,” Quintero says.
However, there are other considerations besides oil quality. “The US is no longer the only one playing here. China is also exploiting both of our countries. And if Venezuela is still under sanctions, the US will be shut out, but its rivals will be free to act. Become.”
And natural gas!
I also wanted to talk to Quintero about natural gas. Europeans recently realized that relying too much on Russia could be problematic and changed their view of this resource.
In 2023, the European Union announced plans to capture gas from explosions at oil fields through the Global Gateway Initiative, a kind of counterweight to China’s Belt and Road initiative, albeit on a much smaller scale.
Europe remains interested in Venezuela’s natural gas, but the project is not going anywhere, Quintero said. Instead, they primarily focus on offshore gas fields such as Kardon and Dragon.
“This was not a realistic idea because the associated gas coming out of the oil field is first and foremost used for reinjection underground as part of the oil extraction process. Only the surplus can be exported.”
I told him that gas is still flaring, especially in the eastern region around Maturin. Industry insiders told me that Venezuela burns more into the sky than Colombia consumes. The amount is estimated at 2 billion cubic feet per day.
“What we at VEPICA and other companies are trying to do is compress the gas so we can capture that gas and reinject it and sell it.”
There are also huge reserves of “free” gas unrelated to oil. Venezuela holds 80% of Latin America’s proven reserves. “The cost is also very low compared to world prices. Production costs about $2 to $3 per British thermal unit, but it can be sold for $9 in Colombia and $19 in Europe.”
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