US energy secretary says will control Venezuelan oil sales 'indefinitely'

WASHINGTON

U.S. Energy Secretary Chris Wright said on Jan. 7 that Washington will control sales of Venezuelan oil "indefinitely," a day after President Donald Trump announced Venezuela's interim leaders had agreed to U.S.-managed marketing of 30-50 million barrels of crude.

"We're going to market the crude coming out of Venezuela, first this backed-up stored oil, and then indefinitely, going forward, we will sell the production that comes out of Venezuela into the marketplace," Wright said at a Goldman Sachs energy event in Miami.

Days after the U.S. toppling of Venezuelan leader Nicolas Maduro, which has left his deputy and other allies in charge, Wright suggested sanctions on the country's oil sector would be waived to facilitate the export of its oil.

The United States would be "the supplier" of the diluting agents needed to get Venezuela's extra-heavy crude oil ready for shipment, he said.

"As we make progress with the government, you know, we'll enable the importing of parts and equipment and services to kind of prevent the industry from collapsing, stabilize the production, and then as quickly as possible, start to see it growing again."

Wright, a former oil and gas executive, said it would require "tens of billions of dollars and significant time" to get Venezuela's production back to historical highs of over three million barrels per day.

"But why not?" he questioned.

In the short-to-medium term, he said, several hundreds of thousands of additional barrels could be achieved "for just small capital deployment, spare parts, people try to revitalize some of the existing stuff."

Venezuela claims to sit on about a fifth of the world's oil reserves, but observers pointed out that a quick ramp-up of output would be hamstrung by several issues including its creaking infrastructure, low prices and political uncertainty.

Trump said Tuesday that 30-50 million barrels of Venezuelan crude will be shipped to U.S. ports, with the revenue, perhaps more than $2 billion at current market prices, placed under his personal control.

On Saturday, U.S. special forces snatched Maduro and his wife from Caracas and whisked them to New York to face trial on drug charges.

It was not immediately clear whether Venezuela's interim president Delcy Rodriguez had agreed to hand over the oil, how the plan would work, or what its legal basis would be.

"Think about where Venezuela was a week ago. You know, it's a little different today, but everything else is the same way it was," Wright said.

"So it is going to require this cooperation between, and pressure between, the United States and Venezuela."