Economy | Business and Economy

Trump’s bid to commandeer Venezuela’s oil sector faces hurdles, experts say

Exploiting Latin American country’s reserves faces hurdles from decrepit infrastructure to leadership uncertainty.

United States President Donald Trump has promised to “take back” Venezuela’s oil reserves and unleash them onto the global market after abducting Venezuelan President Nicolas Maduro.

But exploiting the Latin American country’s vast reserves would face a host of big hurdles, from decrepit infrastructure and legal obstacles to leadership uncertainty in Caracas and an excess supply of oil in the global market, experts say.

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Venezuela possesses the world’s largest known oil reserves – estimated to be some 303 billion barrels – but currently produces only a tiny fraction of global output. Its estimated output was 860,000 barrels per day (bpd) in November, less than 1 percent of the world’s total, compared with 3.7 million bpd during peak production in 1970.

The oil sector’s decline has been blamed on the combined effects of US sanctions and years of underinvestment, mismanagement and corruption under Maduro and his left-wing predecessor, Hugo Chavez.

While the Trump administration could boost supply in the short term by lifting sanctions, restoring Venezuela’s output to anything near peak levels would require huge investment and likely take years, according to energy analysts.