Trump considers taking control of Venezuela’s PDVSA, lowering oil prices to US$50 a barrel: WSJ

BENGALURU - US President Donald Trump and his advisers are

planning an initiative to dominate the Venezuelan oil industry

for years to come, and the President told aides he believes his efforts

could help lower oil prices

to US$50 a barrel, The Wall Street Journal reported on Jan 7.

A plan under consideration includes the US exerting some control over Venezuela’s state-run oil company PDVSA, including acquiring and marketing the bulk of the company’s oil production, the report said, citing people familiar with the matter.

Reuters could not immediately confirm the report. The White House did not respond immediately to Reuters’ request for comment.

Oil prices have slid this week on the prospect of higher Venezuelan crude output, though they recovered on Jan 8, with US crude rising 0.7 per cent to US$56.38 a barrel, while Brent crude futures advanced 0.7 per cent to US$60.37.

The US is looking to wield control of PDVSA through a deal under which it would work to buy and possibly distribute the company’s oil, including through past and current joint ventures with oil majors like Chevron, the report added.

PDVSA said earlier on Jan 7 that it is progressing in negotiations with the US for oil sales, as a board member told Reuters the US will need to buy cargoes at international prices.

Washington and Caracas are in talks to supply up to 50 million barrels of Venezuelan oil to the US.

US officials have said this week that proceeds from the Venezuelan oil supply, which is expected to help PDVSA drain inventories amid a severe oil blockade, will go to a US-overseen trustee.

Proceeds are meant to finance supplies of American goods to Venezuela.

Mr Trump is also pressing American oil companies to invest in Venezuela’s energy sector. The Financial Times reported on Jan 7 that oil majors want “serious guarantees” from Washington before they make large investments.

He is scheduled to meet the heads of major oil companies at the White House on Jan 9 to discuss ways of raising Venezuela’s oil production. Representatives from Exxon Mobil, ConocoPhillips and Chevron are expected to be present.

Chevron is in talks with the US government to expand a key licence to operate in Venezuela so it can increase crude exports to its own refineries and sell to other buyers, sources said on Jan 7.

The company is the only US oil major operating in Venezuela, which it does under an authorisation from the US government that exempts it from sanctions on the country. REUTERS