The details of the Trump-Venezuela oil deal are trickling out slowly. There is still much we don’t know, but it is now clear that a Venezuelan company with strong connections to the existing government, some experience in the oil business, and a reputation that has raised legal questions will be our partner in the joint venture. It is also fairly certain that our primary role in the process will be to provide legal and military protection to the other parties in exchange for some sort of power to control the distribution of at least some of the oil.
Several points are relevant here. First, I cannot tell whether the US government will be providing capital for the joint venture. If it is, we will be incurring a significant financial risk. Second, demanding an equity stake in a company in exchange for protection is something Trump has done on previous occasions; it makes the US government sound like a Mafia don. Third, our new Venezuelan business partner (chosen by Trump and Rubio without any public process) doesn’t have anything like the technical and financial resources to engage in exploration at this level, so the assistance of Chevron will be essential. As a result, I have to imagine that Chevron will be entitled to the lion’s share of the profits. Finally, this deal will give us what amounts to an equity stake in the Delcy regime. We will be enmeshed in Venezuelan politics on behalf of our business associates for the foreseeable future, and one can imagine a scenario in which we send troops to protect oil facilities and even the government itself in order to save our financial interests in Venezuelan oil.
It smells pretty bad–imperialism meets crony capitalism.