1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,760 --> 00:00:11,160 Speaker 2: If I come to correctly, I think he mentioned the 3 00:00:11,160 --> 00:00:14,440 Speaker 2: world about twenty or twenty one times his first press conference. 4 00:00:14,520 --> 00:00:16,040 Speaker 2: That really tells me everything. 5 00:00:16,280 --> 00:00:19,480 Speaker 3: That's Bloomberg opinion columnist Javier Blass, and that word he's 6 00:00:19,520 --> 00:00:22,720 Speaker 3: talking about that President Trump used almost two dozen times 7 00:00:22,720 --> 00:00:26,239 Speaker 3: in that one press conference is oil. It's part of 8 00:00:26,280 --> 00:00:31,240 Speaker 3: almost every conversation about Venezuela. The President has big plans 9 00:00:31,280 --> 00:00:34,680 Speaker 3: for the country, and he's hyper focused on its energy sector. 10 00:00:35,080 --> 00:00:40,480 Speaker 4: We're going to have our very large United States oil companies, 11 00:00:40,520 --> 00:00:44,320 Speaker 4: the biggest anywhere in the world, go in spend billions 12 00:00:44,400 --> 00:00:49,720 Speaker 4: of dollars, fix the badly broken infrastructure, the oil infrastructure, 13 00:00:50,560 --> 00:00:52,800 Speaker 4: and start making money for the country. 14 00:00:55,240 --> 00:00:58,760 Speaker 3: Since the attack, oil prices have swung back and forth, 15 00:00:59,080 --> 00:01:01,240 Speaker 3: and on Friday they were right about where they were 16 00:01:01,320 --> 00:01:04,360 Speaker 3: the night before. The US removed Nicholas Maduro from Venezuela. 17 00:01:04,880 --> 00:01:07,600 Speaker 3: On Friday afternoon, President Trump met with executives from the 18 00:01:07,600 --> 00:01:09,800 Speaker 3: oil industry at the White House to talk about what 19 00:01:09,920 --> 00:01:10,559 Speaker 3: comes next. 20 00:01:10,880 --> 00:01:13,480 Speaker 5: All of the companies here today are going to be 21 00:01:14,080 --> 00:01:17,880 Speaker 5: treasured partners and bringing the nation of Venezuela back to life, 22 00:01:17,920 --> 00:01:22,800 Speaker 5: restoring its economy and generating great wealth for their companies 23 00:01:22,840 --> 00:01:26,840 Speaker 5: and for their people, and also great wealth for the 24 00:01:26,880 --> 00:01:31,520 Speaker 5: American people, and tremendous wealth for the companies that are going. 25 00:01:31,640 --> 00:01:35,440 Speaker 3: So why Venezuela It only produces about one percent of 26 00:01:35,480 --> 00:01:38,440 Speaker 3: the world's oil, Javier Blast says, you have to look 27 00:01:38,480 --> 00:01:41,119 Speaker 3: at the country's past to understand its potential. 28 00:01:41,440 --> 00:01:45,440 Speaker 2: Back in nineteen seventy, which is the heyday of the industry, 29 00:01:45,760 --> 00:01:49,000 Speaker 2: the country produced about three point seven million borrows a day. 30 00:01:49,440 --> 00:01:53,200 Speaker 2: Today he palms about one million borrows today. It is 31 00:01:53,360 --> 00:01:57,080 Speaker 2: a shadow of what he used to be. But he 32 00:01:57,240 --> 00:02:01,040 Speaker 2: has quite a lot of oil and the means to 33 00:02:01,080 --> 00:02:05,400 Speaker 2: be one of the top oil producing countries. But having 34 00:02:05,480 --> 00:02:09,079 Speaker 2: the means doesn't mean that it's gonna happen. 35 00:02:11,200 --> 00:02:13,079 Speaker 3: I'm David Gerat and this is the big take from 36 00:02:13,080 --> 00:02:17,200 Speaker 3: Bloomberg News on today's show, Venezuela's oil, what it would 37 00:02:17,200 --> 00:02:19,520 Speaker 3: take to get it flowing the way President Trump wants, 38 00:02:19,680 --> 00:02:22,799 Speaker 3: and how it's key to the president's foreign policy objectives 39 00:02:22,919 --> 00:02:31,680 Speaker 3: and his political success at home. Javier Bloss is a 40 00:02:31,720 --> 00:02:35,680 Speaker 3: columnist with decades of experience covering energy that He's spent 41 00:02:35,840 --> 00:02:38,880 Speaker 3: years touring oil fields and refineries. 42 00:02:38,480 --> 00:02:41,840 Speaker 2: Oil for Venezuela is a costco is basically what keeps 43 00:02:41,880 --> 00:02:42,840 Speaker 2: the economy running. 44 00:02:43,200 --> 00:02:46,040 Speaker 3: And given that, Javier says, you'd think the country would 45 00:02:46,040 --> 00:02:48,920 Speaker 3: have invested more in the industry in recent years. But 46 00:02:49,000 --> 00:02:53,520 Speaker 3: Venezuela's oil infrastructure has fallen into disrepair. It's a shadow 47 00:02:53,680 --> 00:02:54,560 Speaker 3: of what it once was. 48 00:02:55,200 --> 00:03:01,119 Speaker 2: The oil sector under Maduro was just complete mismanagement, corruption, 49 00:03:01,480 --> 00:03:06,600 Speaker 2: and then exacerbated by the impact of American sanctions on 50 00:03:06,639 --> 00:03:12,359 Speaker 2: the sexual The facilities are completely impact state. They need repairs, 51 00:03:12,400 --> 00:03:15,919 Speaker 2: they need basic maintenance, and that has not been happening. 52 00:03:16,320 --> 00:03:19,240 Speaker 2: Venezuela has lost about twenty five percent of his population, 53 00:03:19,600 --> 00:03:23,120 Speaker 2: and this has been mostly educated people who used to 54 00:03:23,120 --> 00:03:26,160 Speaker 2: have very well paid jobs in the oil industry and 55 00:03:26,200 --> 00:03:29,040 Speaker 2: that they are no longer there. So under Maduro it 56 00:03:29,200 --> 00:03:30,920 Speaker 2: was just a complete collapse. 57 00:03:31,200 --> 00:03:34,240 Speaker 3: Delci Rodriguez was the country's oil minister before she became 58 00:03:34,280 --> 00:03:36,720 Speaker 3: the vice president, now the acting president of the country. 59 00:03:37,120 --> 00:03:39,480 Speaker 3: How could Venezuela's approach to oil shift now that she's 60 00:03:39,520 --> 00:03:40,200 Speaker 3: in charge. 61 00:03:40,400 --> 00:03:43,640 Speaker 2: Well, the first question is is he really in charge? 62 00:03:43,960 --> 00:03:50,600 Speaker 2: Because Trump claims that he is running Venezuela, so it's 63 00:03:50,600 --> 00:03:54,080 Speaker 2: difficult to know exactly who really is calling the shots 64 00:03:54,120 --> 00:03:59,800 Speaker 2: in Caracas. Delci Rodriguez has been seen as a relative 65 00:04:00,200 --> 00:04:04,960 Speaker 2: moderate figure within the Chavismo, this revolutionary movement that has 66 00:04:05,000 --> 00:04:08,680 Speaker 2: been running Venezuela for the last twenty five years. So 67 00:04:09,160 --> 00:04:11,640 Speaker 2: very much depends on what she wants to do, but 68 00:04:11,720 --> 00:04:14,720 Speaker 2: it's also going to depend a lot of what the 69 00:04:14,720 --> 00:04:17,680 Speaker 2: White House allows her to do. The oil fields there 70 00:04:17,720 --> 00:04:21,520 Speaker 2: are so prolific that even with just some basic expending, 71 00:04:21,640 --> 00:04:27,040 Speaker 2: some basic maintenance, things could really regain some traction very quickly. 72 00:04:27,080 --> 00:04:30,200 Speaker 2: And just to get a sense of what I'm talking about, 73 00:04:30,600 --> 00:04:34,000 Speaker 2: I have been speaking with format executives of the state 74 00:04:34,080 --> 00:04:38,680 Speaker 2: on oil company called Peevesa and Venezuela and oil engineers, 75 00:04:38,720 --> 00:04:42,120 Speaker 2: geologists who have a great knowledge of the industry, and 76 00:04:42,160 --> 00:04:43,800 Speaker 2: one of the things that they said to me is, 77 00:04:45,000 --> 00:04:48,120 Speaker 2: so you to understand what the problem was, is that 78 00:04:48,680 --> 00:04:51,919 Speaker 2: all what is needed today to get things starting to 79 00:04:51,960 --> 00:04:56,719 Speaker 2: look a bit better. Is that pump that failed seven 80 00:04:56,839 --> 00:05:00,720 Speaker 2: years ago, We're going to replace it. That oil pipeline 81 00:05:00,760 --> 00:05:04,320 Speaker 2: that started leaking three years ago, We're gonna fix it. 82 00:05:04,800 --> 00:05:07,240 Speaker 2: This is the state of the industry just it was 83 00:05:07,480 --> 00:05:11,520 Speaker 2: led to rot. And now if some money can be 84 00:05:11,600 --> 00:05:15,440 Speaker 2: a spend that could really go a great way into 85 00:05:15,480 --> 00:05:18,719 Speaker 2: a stabilizing production and it started growing. But they're going 86 00:05:18,800 --> 00:05:22,799 Speaker 2: to be conflicted. Needs Venezuela needs food, lots of food. 87 00:05:22,800 --> 00:05:27,800 Speaker 2: It's a hungry nation. And how the White House balanced 88 00:05:27,800 --> 00:05:32,359 Speaker 2: that food versus oil, how the government in Caracas balance that, 89 00:05:32,480 --> 00:05:35,680 Speaker 2: and at the same time, the relationship with Washington. I 90 00:05:35,720 --> 00:05:37,120 Speaker 2: don't know how that's gonna play out. 91 00:05:38,839 --> 00:05:41,280 Speaker 3: You know, you and I have talked recently about how 92 00:05:41,320 --> 00:05:43,520 Speaker 3: the world is washed with cheap oil. If you guys 93 00:05:43,600 --> 00:05:46,880 Speaker 3: doesn't need cheap oil at this point in time. Given that, 94 00:05:47,040 --> 00:05:49,200 Speaker 3: what is your sense of the motivations here on the 95 00:05:49,320 --> 00:05:50,200 Speaker 3: United States's part? 96 00:05:50,600 --> 00:05:53,880 Speaker 2: Well, I think that President Trunk has been quite transparent 97 00:05:53,960 --> 00:05:57,080 Speaker 2: about this. I mean, I remember back in two thousand 98 00:05:57,080 --> 00:06:00,200 Speaker 2: and three covering the invasion of Iraq and a lot 99 00:06:00,240 --> 00:06:04,279 Speaker 2: of debate and really heated arguments about is this about oil? 100 00:06:04,720 --> 00:06:07,400 Speaker 2: And the answer at that point from the administration of 101 00:06:07,520 --> 00:06:10,960 Speaker 2: George W. Bush was absolutely not. This is about democracy. 102 00:06:11,000 --> 00:06:14,839 Speaker 2: And in this occasion, President Trump has been very clear 103 00:06:14,880 --> 00:06:18,960 Speaker 2: that oil is absolutely central to what he's doing, and 104 00:06:19,000 --> 00:06:22,440 Speaker 2: he has been quite transparent that he wants lower oil prices, 105 00:06:22,440 --> 00:06:25,279 Speaker 2: and I mean lower than today, which are already the 106 00:06:25,360 --> 00:06:28,680 Speaker 2: lowest in five years. We are trading between fifty five 107 00:06:28,680 --> 00:06:31,279 Speaker 2: and sixty dollars a barrel, and President Trump in the 108 00:06:31,320 --> 00:06:35,560 Speaker 2: past has talked about getting American oil West Texas Intermediate 109 00:06:35,760 --> 00:06:39,120 Speaker 2: down to fifty dollars a barrel, and he wants the 110 00:06:39,160 --> 00:06:41,479 Speaker 2: price of castling down to two and a half dollars. 111 00:06:41,640 --> 00:06:42,960 Speaker 2: I think he will be very happy. 112 00:06:43,200 --> 00:06:45,479 Speaker 3: The US produces a lot of oil, has access to 113 00:06:45,480 --> 00:06:48,920 Speaker 3: oil from Latin America, from Canada. How much influence does 114 00:06:48,960 --> 00:06:49,880 Speaker 3: that give the US. 115 00:06:50,120 --> 00:06:53,560 Speaker 2: The Americas today all the way from Alaska to Patagonia 116 00:06:53,600 --> 00:06:57,119 Speaker 2: in Argentina, produce about forty percent of the walls oil. 117 00:06:57,160 --> 00:07:01,640 Speaker 2: That's not research, that's actual production today. So President Trump 118 00:07:01,960 --> 00:07:05,680 Speaker 2: is an unfortunate position that this is happening under his watch. 119 00:07:06,120 --> 00:07:08,320 Speaker 2: Some of it he is trying to engineer, but a 120 00:07:08,320 --> 00:07:12,120 Speaker 2: lot of it will be happening, notetheless because of discoveries 121 00:07:12,160 --> 00:07:15,720 Speaker 2: in Brazil, in Guijana, the growth of the industry in Canada, 122 00:07:15,760 --> 00:07:20,040 Speaker 2: and certainly the growth of the usl industry. That means 123 00:07:20,040 --> 00:07:22,320 Speaker 2: that there is a surplus of oil today in the market, 124 00:07:22,360 --> 00:07:24,600 Speaker 2: and it means that prices are going to stay lower 125 00:07:24,640 --> 00:07:26,960 Speaker 2: than that there has been the case in recent years. 126 00:07:27,280 --> 00:07:31,080 Speaker 2: But it also means that that buffer allows for the 127 00:07:31,240 --> 00:07:36,240 Speaker 2: market to carry on if there is some kind of shock, 128 00:07:36,840 --> 00:07:39,720 Speaker 2: and what could be a shock that the US decides 129 00:07:39,760 --> 00:07:44,480 Speaker 2: to do something about Russia or Iran. The American military 130 00:07:44,520 --> 00:07:47,960 Speaker 2: adventures in the past were constrained by the impact that 131 00:07:48,000 --> 00:07:51,400 Speaker 2: those will have in the price of oil. Today, the 132 00:07:51,440 --> 00:07:56,360 Speaker 2: Pentagon really is underrestrained in a way that I don't 133 00:07:56,400 --> 00:07:59,520 Speaker 2: think we have seen in America, probably in the last 134 00:07:59,520 --> 00:08:02,320 Speaker 2: half a sect entry James Monroe, the president more than 135 00:08:02,360 --> 00:08:05,280 Speaker 2: two hundred years ago who coined this faaro influence for 136 00:08:05,360 --> 00:08:08,520 Speaker 2: the United States across the Americas, and then Donald Trump, 137 00:08:08,760 --> 00:08:13,080 Speaker 2: so we get the Donrow doctrine. Secretary Marco Rubio has 138 00:08:13,120 --> 00:08:15,920 Speaker 2: made very clear this this is our backyard. This is 139 00:08:15,920 --> 00:08:20,120 Speaker 2: our area of influence, keeping the Americas for the US, 140 00:08:20,480 --> 00:08:25,360 Speaker 2: preventing other countries to set any kind of footprint, and 141 00:08:25,400 --> 00:08:29,720 Speaker 2: I'm thinking mostly about China and also controlling the natural 142 00:08:29,800 --> 00:08:33,079 Speaker 2: resources of the region. The US can do things today 143 00:08:33,559 --> 00:08:38,160 Speaker 2: that previous presidents probably could not do because the price 144 00:08:38,200 --> 00:08:40,280 Speaker 2: of oil will have gone to more than one hundred 145 00:08:40,280 --> 00:08:43,920 Speaker 2: dollars a barrel, and then gasoline prices will have increased. 146 00:08:45,040 --> 00:08:46,959 Speaker 3: If your President Trump says Venezuela is going to turn 147 00:08:47,000 --> 00:08:49,880 Speaker 3: over thirty to fifty million barrels of oil to the US. 148 00:08:50,240 --> 00:08:52,320 Speaker 3: Here's what is. Energy Secretary Chris Wright said about that 149 00:08:52,320 --> 00:08:54,000 Speaker 3: on Wednesday at a Goldman Sachs conference. 150 00:08:54,080 --> 00:08:57,599 Speaker 6: Look, I'm working directly in cooperation with the Venezuelans, and 151 00:08:58,280 --> 00:09:00,760 Speaker 6: we are going to this is this is the crew 152 00:09:00,880 --> 00:09:03,800 Speaker 6: that's backed up an onshore storage and that's in offshore 153 00:09:04,040 --> 00:09:07,000 Speaker 6: floating storage. It's going to get that crude moving again 154 00:09:07,360 --> 00:09:09,920 Speaker 6: and sell it it just like we did in our businesses. 155 00:09:10,280 --> 00:09:12,959 Speaker 3: Or thirty to fifty million barrels sounds like a lot 156 00:09:13,000 --> 00:09:16,040 Speaker 3: of oil, is it in the grand scheme of things. 157 00:09:16,000 --> 00:09:19,120 Speaker 2: It's not. I mean that is at the high end 158 00:09:19,120 --> 00:09:22,440 Speaker 2: of that range. Fifty million barrels is only half of 159 00:09:22,440 --> 00:09:24,679 Speaker 2: what the world consumes in one day, so it's basically 160 00:09:24,679 --> 00:09:28,640 Speaker 2: twelve hours of global oil consumption. But you put fifty 161 00:09:28,679 --> 00:09:32,040 Speaker 2: million barrels of Venezuelan and oil into the US golf 162 00:09:32,080 --> 00:09:35,720 Speaker 2: of Mexico coast kind of refining system, that's going to 163 00:09:35,760 --> 00:09:37,480 Speaker 2: have an impact. I mean, that is really going to 164 00:09:37,600 --> 00:09:41,959 Speaker 2: overwhelm the market and same prices down. But also more importantly, 165 00:09:42,080 --> 00:09:46,480 Speaker 2: getting that oil flowing will allow the Venezuelans to keep 166 00:09:46,520 --> 00:09:49,360 Speaker 2: production where it was in December close to a million 167 00:09:49,400 --> 00:09:51,640 Speaker 2: barrels a day because they were in a position where 168 00:09:51,679 --> 00:09:54,240 Speaker 2: they will have to shout down production because they didn't 169 00:09:54,280 --> 00:09:56,080 Speaker 2: have anywhere to put the oil, because they were not 170 00:09:56,160 --> 00:09:58,680 Speaker 2: able to esport the oil. So it's not only the 171 00:09:58,760 --> 00:10:01,240 Speaker 2: impact that oil that is the storage will have on 172 00:10:01,360 --> 00:10:04,880 Speaker 2: the American market. Is also that Venezuela kind of start 173 00:10:04,960 --> 00:10:08,520 Speaker 2: the recovery process, although these are really baby steps. 174 00:10:11,200 --> 00:10:13,840 Speaker 3: What the US control of Venezuela's oil could mean for 175 00:10:13,880 --> 00:10:17,800 Speaker 3: two of its biggest rivals, Russia and China, that's coming up. 176 00:10:24,840 --> 00:10:28,160 Speaker 1: Are you concerned about increasing tensions with Russia or because 177 00:10:28,160 --> 00:10:32,840 Speaker 1: of your tankard seizures? And how does the US action 178 00:10:33,000 --> 00:10:37,200 Speaker 1: in Venezuela impact the ongoing relationship with China and the 179 00:10:37,280 --> 00:10:39,880 Speaker 1: President's relationship. 180 00:10:39,320 --> 00:10:43,240 Speaker 7: With President she I think the President has very open, 181 00:10:43,640 --> 00:10:46,920 Speaker 7: honest and good relationships with both President Putin and Russia, 182 00:10:46,960 --> 00:10:48,559 Speaker 7: and also President she of China. 183 00:10:48,960 --> 00:10:51,600 Speaker 3: The effects of President Trump's attack on Venezuela and the 184 00:10:51,679 --> 00:10:54,920 Speaker 3: arrest of President Nicolas Maduro are being felt beyond the 185 00:10:54,960 --> 00:10:56,000 Speaker 3: Western hemisphere. 186 00:10:56,320 --> 00:11:01,319 Speaker 7: We've seen now five vessels seized after the latest action 187 00:11:01,520 --> 00:11:05,160 Speaker 7: reported by US Southern Command. Today, US Force is seen 188 00:11:05,320 --> 00:11:09,200 Speaker 7: boarding that vessel identified as the Olina. 189 00:11:09,280 --> 00:11:13,200 Speaker 3: On Friday, the US Coast Guard seesed another sanctioned oil tanker, 190 00:11:13,360 --> 00:11:16,160 Speaker 3: as the Trump administration continues to crack down on so 191 00:11:16,280 --> 00:11:20,240 Speaker 3: called shadow vessels. These are tankers using murky tactics to 192 00:11:20,320 --> 00:11:24,400 Speaker 3: transport oil from countries facing US sanctions like Russia and Iran. 193 00:11:25,080 --> 00:11:27,600 Speaker 3: A lot of that oil winds up in China, which 194 00:11:27,600 --> 00:11:30,560 Speaker 3: has been a big investor in Venezuela. It's poured money 195 00:11:30,600 --> 00:11:33,920 Speaker 3: into the country's infrastructure and oil refining capacity part of 196 00:11:33,920 --> 00:11:37,800 Speaker 3: its Belt and Road initiative that includes extending and consolidating 197 00:11:38,040 --> 00:11:43,520 Speaker 3: Chinese influence around the world, including in Latin America. So Haafer, 198 00:11:43,679 --> 00:11:46,280 Speaker 3: what does it mean for the world's second largest economy, 199 00:11:46,360 --> 00:11:48,960 Speaker 3: Maduro being removed in President Trump promising these big changes 200 00:11:48,960 --> 00:11:50,320 Speaker 3: to Venezuela's oil industry. 201 00:11:50,440 --> 00:11:52,520 Speaker 2: I think that for China, I mean, first of all, 202 00:11:52,559 --> 00:11:55,199 Speaker 2: they're going to lose access to a source of cheap oil. 203 00:11:55,640 --> 00:11:58,480 Speaker 2: Venezuela was forced to sell his oil at a significant 204 00:11:58,520 --> 00:12:01,839 Speaker 2: discount to China because China was the only buyer. So 205 00:12:02,000 --> 00:12:03,800 Speaker 2: China all the sudden is going to have to find 206 00:12:04,120 --> 00:12:08,199 Speaker 2: a replacement. There is oil in the market that can 207 00:12:08,400 --> 00:12:11,360 Speaker 2: be used to replace Venezuela and oil. Canadian oil is 208 00:12:11,360 --> 00:12:15,199 Speaker 2: of similar quality, but Canadian oil trades around eight to 209 00:12:15,200 --> 00:12:18,920 Speaker 2: ten dollars higher. So that's that's an extra cost. I mean, 210 00:12:19,040 --> 00:12:21,679 Speaker 2: is that gonna really have a massive impact on the 211 00:12:21,760 --> 00:12:24,920 Speaker 2: Chinese economy. As you said, the second largest economy is 212 00:12:24,960 --> 00:12:27,760 Speaker 2: not big enough to really move the needle of the GDP, 213 00:12:27,960 --> 00:12:31,440 Speaker 2: but for some oil refiners in China, they're gonna notice. 214 00:12:31,480 --> 00:12:33,959 Speaker 2: It's more importantly, I think it's the it's the signal 215 00:12:34,000 --> 00:12:37,240 Speaker 2: that the Chinese authorities get out of the Americas. That 216 00:12:37,440 --> 00:12:40,440 Speaker 2: seems to be the message from the Trump administration. These 217 00:12:40,440 --> 00:12:42,680 Speaker 2: are the countries where we have influence, and this is 218 00:12:42,720 --> 00:12:45,840 Speaker 2: our oil, and it's for us to decide. For Russia, 219 00:12:46,600 --> 00:12:50,559 Speaker 2: that's more complicated. President Trump is really driving the price 220 00:12:50,559 --> 00:12:54,240 Speaker 2: of oil down. Russia is selling now oil as low 221 00:12:54,280 --> 00:12:57,880 Speaker 2: as forty dollars a barrel, and by now Vladimir Putin 222 00:12:57,960 --> 00:13:00,960 Speaker 2: also has lost a two that I think he was 223 00:13:00,960 --> 00:13:04,920 Speaker 2: trying to use with President Trump, which was in exchange 224 00:13:04,960 --> 00:13:07,560 Speaker 2: for some kind of deal in Ukraine. Look at the 225 00:13:07,600 --> 00:13:11,400 Speaker 2: oil fields of Siberia. Your American oil companies can have 226 00:13:11,559 --> 00:13:15,800 Speaker 2: access to the Russian oil riches. Well, President Trunk can 227 00:13:15,840 --> 00:13:18,720 Speaker 2: turn around and say, Bladimir, thank you very much for 228 00:13:18,760 --> 00:13:21,960 Speaker 2: your offer, but I control Venezuela now, so you know, 229 00:13:22,240 --> 00:13:29,760 Speaker 2: get lost. American refiners, particularly those in Texas and Louisiana, 230 00:13:30,240 --> 00:13:34,240 Speaker 2: love Venezuela and oil. Most of the Venezuelan oil looks 231 00:13:34,280 --> 00:13:39,160 Speaker 2: more like syrup or even marmalade. It's really biscuits, very 232 00:13:39,200 --> 00:13:44,439 Speaker 2: dense and therefore relatively more difficult to refine. The refineries 233 00:13:44,600 --> 00:13:49,480 Speaker 2: in the US are built precisely to process that kind 234 00:13:49,520 --> 00:13:53,080 Speaker 2: of crude. So while the quality is low, it would 235 00:13:53,080 --> 00:13:56,320 Speaker 2: be a mistake to think that low quality means we 236 00:13:56,400 --> 00:13:57,439 Speaker 2: don't like the oil. 237 00:13:58,480 --> 00:14:02,040 Speaker 3: Any plan to rebuild and deploit Venezuela's oil production capacity 238 00:14:02,160 --> 00:14:05,360 Speaker 3: would be complicated. It could take years and cost upwards 239 00:14:05,440 --> 00:14:08,319 Speaker 3: of one hundred billion dollars according to some estimates. 240 00:14:08,640 --> 00:14:09,320 Speaker 1: But if all. 241 00:14:09,200 --> 00:14:12,200 Speaker 3: Goes well, big Oil could make a lot of money 242 00:14:12,320 --> 00:14:16,560 Speaker 3: in Venezuela. Chevron, the second biggest US oil company, operates 243 00:14:16,600 --> 00:14:19,160 Speaker 3: there and accounts for about twenty five percent of the 244 00:14:19,160 --> 00:14:22,320 Speaker 3: country's output, and refiners like Sitco in the Gulf of 245 00:14:22,360 --> 00:14:24,880 Speaker 3: Mexico are uniquely poised to benefit. 246 00:14:25,160 --> 00:14:28,640 Speaker 2: Did they know exactly what was going to happen? I 247 00:14:28,800 --> 00:14:32,000 Speaker 2: doubt it. I don't think that the American oil industry 248 00:14:32,040 --> 00:14:36,280 Speaker 2: have knowledge of exact military plans or even that Trump 249 00:14:36,320 --> 00:14:39,320 Speaker 2: has already taken the decision to take Maduro. I will 250 00:14:39,360 --> 00:14:42,880 Speaker 2: be very, very surprised about that. Oil companies are in 251 00:14:42,920 --> 00:14:45,200 Speaker 2: some cases, when you are talking about big oil is 252 00:14:45,240 --> 00:14:48,200 Speaker 2: always the case, they're like mini countries. They have almost 253 00:14:48,200 --> 00:14:51,640 Speaker 2: like their own diplomatic surveys who is working on potential 254 00:14:51,680 --> 00:14:56,240 Speaker 2: outcomes in potential scenarios in oil rich countries like Venezuela. 255 00:14:56,400 --> 00:14:59,360 Speaker 2: There's more than an interest. Chevron is already there. Let's 256 00:14:59,360 --> 00:15:02,160 Speaker 2: not forget that American's second largest oil company has to 257 00:15:02,200 --> 00:15:05,320 Speaker 2: stay in Venezuela. Has fought very hard over the last 258 00:15:05,360 --> 00:15:08,280 Speaker 2: twenty five years, not only with the government in Venezuela, 259 00:15:08,320 --> 00:15:11,160 Speaker 2: but so with several administrations both on the left and 260 00:15:11,200 --> 00:15:13,320 Speaker 2: on the right and the White House to be able 261 00:15:13,400 --> 00:15:17,040 Speaker 2: to keep his operations there in some way. So there 262 00:15:17,080 --> 00:15:20,160 Speaker 2: is interest. I mean, is that interest means that everyone 263 00:15:20,160 --> 00:15:22,000 Speaker 2: in big oil is going to be investing billions of 264 00:15:22,000 --> 00:15:24,040 Speaker 2: the last in Venezuela tomorrow. And now, I mean the 265 00:15:24,080 --> 00:15:26,800 Speaker 2: price of oil is low, investors are putting pressure on 266 00:15:26,880 --> 00:15:30,680 Speaker 2: companies to go easy on spending. So the interest may 267 00:15:30,720 --> 00:15:34,640 Speaker 2: not transform in in media the spending, but oil companies 268 00:15:35,120 --> 00:15:38,160 Speaker 2: always go to where the oil barrels are. 269 00:15:38,520 --> 00:15:42,480 Speaker 3: President Trump has floated reimbursing companies for spending money on 270 00:15:42,680 --> 00:15:47,040 Speaker 3: improving infrastructure Venezuela, even using taxpayer dollars to do that. 271 00:15:47,400 --> 00:15:49,440 Speaker 3: In your view, is that essential? Would they do this 272 00:15:49,480 --> 00:15:51,320 Speaker 3: otherwise or they need to have some sort of incentive 273 00:15:51,320 --> 00:15:51,640 Speaker 3: like that. 274 00:15:52,160 --> 00:15:55,040 Speaker 2: I think that probably they would like backstop by the government, 275 00:15:55,120 --> 00:15:59,160 Speaker 2: perhaps loans, back back up by the Esport Import Bank 276 00:15:59,200 --> 00:16:01,960 Speaker 2: of the United States. Again, that's not new. It happens 277 00:16:02,000 --> 00:16:04,480 Speaker 2: in many other projects at the moment. Some of the 278 00:16:04,520 --> 00:16:07,600 Speaker 2: biggest oil companies in America have some kind of loan 279 00:16:07,680 --> 00:16:10,120 Speaker 2: guarantees from the US to invest in places like say 280 00:16:10,240 --> 00:16:14,680 Speaker 2: Mozambique on natural gas LNG projects. So that's what I 281 00:16:14,720 --> 00:16:17,720 Speaker 2: think that they are talking about direct subsidies. I will 282 00:16:17,760 --> 00:16:20,000 Speaker 2: be very surprised about that. I mean, what the hell 283 00:16:20,320 --> 00:16:23,000 Speaker 2: the US government would be subsidized in the oil industry 284 00:16:23,160 --> 00:16:26,320 Speaker 2: when they can make it back perfectly fine in drilling 285 00:16:26,400 --> 00:16:30,080 Speaker 2: in s Texas, New Mexico, Oklahoma. I would not understand that. 286 00:16:30,200 --> 00:16:34,680 Speaker 2: But what I know, David, over the last few months, 287 00:16:34,760 --> 00:16:37,480 Speaker 2: I have been surprised of what the Republican Party does 288 00:16:37,520 --> 00:16:41,080 Speaker 2: to the American capitalist system. I mean, I thought I 289 00:16:41,200 --> 00:16:44,080 Speaker 2: was about getting the government out of companies, and the 290 00:16:44,120 --> 00:16:47,360 Speaker 2: White House is about getting equity in companies. So I 291 00:16:47,400 --> 00:16:50,080 Speaker 2: don't know. I mean, will I be surprised if the 292 00:16:50,280 --> 00:16:53,800 Speaker 2: US owns an equity stake in oil fields that they 293 00:16:53,800 --> 00:16:57,320 Speaker 2: are owned by American oil companies in Venezuela. 294 00:16:57,920 --> 00:16:58,080 Speaker 5: Yeah. 295 00:16:58,120 --> 00:16:59,800 Speaker 2: A year ago I would have said yes, I will 296 00:16:59,840 --> 00:17:03,800 Speaker 2: be very surprised. That's not going to happen today. I 297 00:17:03,840 --> 00:17:04,240 Speaker 2: don't know. 298 00:17:04,400 --> 00:17:08,359 Speaker 3: Maybe we hear President Trump making this geopolitical argument for 299 00:17:08,800 --> 00:17:11,000 Speaker 3: taking control of the Venezuelan oil industry. He's making an 300 00:17:11,000 --> 00:17:13,720 Speaker 3: economic case to the American people as well. What is 301 00:17:13,760 --> 00:17:17,480 Speaker 3: the reward he's promising US citizens and how long does 302 00:17:17,520 --> 00:17:19,359 Speaker 3: he have to make good on that promise. 303 00:17:19,680 --> 00:17:22,760 Speaker 2: I think that the rule he's promising to US citizens, 304 00:17:22,760 --> 00:17:26,800 Speaker 2: and particularly ahead of the Midtown selection, is I get it. 305 00:17:27,040 --> 00:17:29,920 Speaker 2: Inflation has been a big problem, and I'm fixing it. 306 00:17:30,400 --> 00:17:33,040 Speaker 2: And at least he's fixing one of the most visible 307 00:17:33,160 --> 00:17:38,040 Speaker 2: prices for Americans on a daily basis. Almost everyone who 308 00:17:38,080 --> 00:17:40,720 Speaker 2: is commuting to war going with to drop the kids 309 00:17:40,720 --> 00:17:43,359 Speaker 2: at the school, et cetera, et cetera. Sees the price 310 00:17:43,400 --> 00:17:46,800 Speaker 2: of gasoline on the big signs of the pumpa stations, 311 00:17:47,080 --> 00:17:51,080 Speaker 2: and I think that his promise to the American citizens 312 00:17:51,320 --> 00:17:53,600 Speaker 2: is We're going to fix the price of oil. We're 313 00:17:53,600 --> 00:17:56,320 Speaker 2: going to fix the price of gasoline. And by the way, 314 00:17:56,720 --> 00:17:59,160 Speaker 2: this is not a quack mare in the Middle East, 315 00:18:00,080 --> 00:18:02,760 Speaker 2: kilometers away in a place that you have never heard of. 316 00:18:03,200 --> 00:18:06,200 Speaker 2: This is it by doing it jus round the corner 317 00:18:06,359 --> 00:18:08,440 Speaker 2: across the Caribbean, in our backyard. 318 00:18:15,320 --> 00:18:17,840 Speaker 3: This is the Big Take from Bloomberg News. I'm David Gerat. 319 00:18:17,960 --> 00:18:20,840 Speaker 3: The show is hosted by me wanha and Sarah Holder. 320 00:18:21,280 --> 00:18:24,960 Speaker 3: The show is made by Aaron Edwards, David Fox, Eleanor Harrison, Dengate, 321 00:18:25,040 --> 00:18:29,320 Speaker 3: Pattie Hirsch, Rachel Lewis, Chrisky, Naomi Julia Press, Tracy Samuelson, 322 00:18:29,400 --> 00:18:32,800 Speaker 3: Naomi Shavin, Alex se Cura, Julia Weaver, Young Young, and 323 00:18:32,880 --> 00:18:35,359 Speaker 3: Takei Yasuzawa. To get more from The Big Take and 324 00:18:35,480 --> 00:18:38,720 Speaker 3: unlimited access to all of Bloomberg dot Com, subscribe today 325 00:18:38,760 --> 00:18:42,479 Speaker 3: at Bloomberg dot Com Slash Podcast offer. Thanks for listening. 326 00:18:42,600 --> 00:18:47,240 Speaker 3: We'll be back on Monday.