Ramping up oil production in Venezuela after years of industry neglect will take time and bring only limited short-term gains, the chief energy economist at the International Energy Agency said on Tuesday.
U.S. President Donald Trump has urged U.S. energy firms to invest $100 billion to rebuild Venezuela’s oil industry, after U.S. forces in an overnight raid on Caracas on January 3 removed the country’s president from power.
“Short-term implications (of developments in Venezuela), in our view, are likely to be relatively limited,” IEA’s Chief Energy Economist Tim Gould told an energy conference in Norway on Tuesday.
Venezuela has the world’s largest estimated oil reserves but its crude output remains at a fraction of capacity due to decades of mismanagement, lack of investment and sanctions, official data shows.
“It strikes me as somewhat misleading when you see all this discussion about Venezuela having the largest oil reserves or resources. As we all know, they’re not easy to produce, they’re not easy to bring to market,” Gould said.
Venezuela’s “dilapidated, antiquated oil infrastructure” needs a lot of investments before it can start bringing these resources to the market, he added.
(Reporting by Nerijus Adomaitis and Nora Buli Editing by Bill Berkrot)