Secretary of State Marco Rubio said Wednesday that the Trump administration has a three-phase plan for Venezuela following the U.S. military raid that captured the country’s leader, Nicolás Maduro, and left its vice president, Delcy Rodríguez, in charge.
The first phase will focus on stabilizing the country, an effort that will be funded in part by taking Venezuela’s oil and selling it on the open market.
“We are going to take between 30 and 50 million barrels of oil,” Rubio told reporters following a closed-door briefing for senators on Capitol Hill. “We are in the midst right now and in fact about to execute on a deal to take all the oil.”
The amount of oil cited by Trump and Rubio equals roughly two months of production for Venezuela, worth between $1.8 billion and $3 billion, according to The New York Times.
The second phase, Rubio said, would revolve around recovery for the nation, a process that will include “rebuilding civil society” and ensuring that “American, Western and other companies have access to the Venezuelan market in a way that’s fair.” The third and final phase will focus on transitioning to a democratic system.
Trump claims control: Rubio’s remarks echoed President Trump’s statements about the U.S. plan for the South American nation.
“I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” Trump said in a social media post Tuesday evening. “This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!”
Trump also said that Venezuela would purchase only American-made goods with funds provided by oil sales. “In other words, Venezuela is committing to doing business with the United States of America as their principal partner – A wise choice, and a very good thing for the people of Venezuela, and the United States,” Trump announced Wednesday.
Although there is still uncertainty about how the process will play out, Energy Secretary Chris Wright said Wednesday that the Trump administration plans to maintain control “indefinitely,” and will begin by selling oil that is currently in storage.
“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 an energy conference in Miami.
Wright also indicated that the money from the sale of the oil will be controlled by the U.S.
“We’re going to let the oil flow, sell that market to United States refineries and to around the world to bring better oil supplies, but have those sales done by the U.S. government and deposited into accounts controlled by the U.S. government,” he said.
Some of the funds could be used eventually to pay back U.S. oil giants including Exxon Mobil and ConocoPhillips, which lost assets when the oil industry was nationalized by former Venezuelan President Hugo Chavez, Wright said.
Selling the oil “will benefit the American people, the American economy and global energy markets, but of course, it will also massively benefit the people of Venezuela,” Wright added.
Questions abound: There are still many questions about the mechanics of the oil transfer and sale, and some lawmakers said they want to oversee the process.
Republican Sen. Kevin Cramer said Wright has his support, but he wants to see the details. “Nobody’s going to do a better job than him in terms of making sure that that oil is properly marketed,” he said, per Politico. “Congress will have an oversight role. He’ll be up here testifying in front of us exactly how they’re doing it.”
An ‘insane plan’: More broadly, some critics are questioning the legality and the economic viability of the plan.
Democratic Sen. Chris Murphy expressed profound doubts about the project overall. “This is an insane plan,” he said following the briefing by Rubio and other top officials. “They are proposing to steal Venezuela's oil at gunpoint forever and use that leverage to run the country. ... The scope and insanity of this is absolutely stunning.”
Murphy added that he thinks the country’s involvement with Venezuela “is going to be a very, very rough ride for the U.S.”
Some political and economic experts also questioned the viability of the project.
Robert Pape, a political scientist at the University of Chicago, said the U.S. plan to rebuild the Venezuelan oil industry faces serious security challenges. “The problem here is insurgency, terrorism and guerrillas,” he told NBC News. “There is no way you’re going to be able to send in the civilian contractors” to rebuild infrastructure.
“Venezuela has the jungles of Vietnam and the mountains of Afghanistan,” Pape added.
Even if the country can be stabilized politically, it’s not clear that Venezuela would necessarily offer attractive returns to oil firms, given the need for enormous investments in infrastructure following years of neglect. Much of the nation’s oil is heavy, sour crude, which is hard to extract and costly to refine. The oil itself “is so corrosive, it eats metal,” energy expert Matt Randolph told NBC. “That’s why you need $100 billion in investments for infrastructure,” Randolph added, “because as it sat there, it has just rotted away.”
That said, the refineries already built on the U.S. Gulf Coast can handle the heavy Venezuelan oil, creating the potential for profits for U.S. firms. But the price of oil needs to be high enough to make the refining worthwhile, and some experts say current prices are too low.
“Oil prices have to be significantly higher than they are now for production to grow in Venezuela,” Randolph said.