No. of Recommendations: 1
ME: Good article.
“In preparation for regime change, there had been engagement. But it’s been sporadic and relatively flatly received by the industry,” this person said. “It feels very much a shoot-ready-aim exercise.”
ME: We blew up the first boat on Sept 2, the article is Jan 3. It says we've been having talks with the oil companies for the past weeks - that's December. We went 3 months without really engaging them - Sep, Oct, Nov - then talks. That's why it seems and feels this way. Shoot-ready-aim.
"A central concern for U.S. industry executives is whether the administration can guarantee the safety of the employees and equipment that companies would need to send to Venezuela, how the companies would be paid, whether oil prices will rise enough to make Venezuelan crude profitable and the status of Venezuela’s membership in the OPEC oil exporters cartel. U.S. benchmark oil prices were at $57 a barrel, the lowest since the end of the pandemic, as of the market’s close on Friday."
ME: $57 a barrel is low, so it's a long term investment that will pay back nicely if the price of oil goes up. But this will not be a stable situation for at least a couple of decades even if we do things right.
“Will the U.S. be able to attract U.S. oilfield services to go to Venezuela?” the executive asked. “Maybe. It would have to involve the services companies being able to contract directly with the U.S. government.”
ME: This means if things go bad, we pay. It's Latin America - so we'll likely pay.
“If you were to see a disorderly transition, obviously I think that would make it very challenging for American companies to enter Venezuela,” said Filipetti, who is now executive director of nonpartisan foreign policy group The Vandenberg Coalition. “It’s not just about getting rid of Maduro. It’s also about making sure that the legitimate opposition comes into power. ”
ME: We are likely to have a disorderly transition, so the Fed will have to contract and guarantee payment. Trump doesn't seem imterested in a legitimate government, maybe Rubio will be.
“Venezuela would be a crown jewel if the above-ground risk is removed. I have companies saying let’s see where this lands,” said Derentz, who served in Trump’s National Security Council during his first term. “I don’t see anything that gives me the sense that this is a ripe opportunity.”
ME: You can't really remove the above ground risk without committing a lot militarily, and we don't want to do that. This is a risky, hastily-put-together, unorganized, and a potentially costly play. Iran, China, etc, can fund guerilla warfare on the cheap. But we could get lucky.
