Is this the biggest oil deal in history?

**Vishala Sripatma** (0:01)
Is it the biggest oil deal in US history?

**Ali Meshiri** (0:04)
Venezuela got the largest resource. It's about 300 billion barrels of light-heavy and extra-heavy oil.

**Vishala Sripatma** (0:13)
It's World Business Report from the BBC World Service.
I'm Vishala Sripatma. On the way, Venezuela could soon be pumping out a lot more oil. But will life get any better for people living there? Uber is leaving Nigeria. We'll look at what that means for drivers and passengers who depend on the platform every day. Plus, the Venice Film Festival has rolled out the red carpet. So why does it feel like a little less glamorous this year?
So Donald Trump has never hidden his ambitions for Venezuela's vast oil wealth. And after helping oust Nicolas Maduro earlier this year, he even said the US would effectively run the country and manage its oil sales. Well now, that vision has taken a huge step forward with a US-led company securing 100-year rights to 17 Venezuelan oil fields containing around 65 billion barrels of crude. Mr Trump is calling it the biggest oil deal in history, while Venezuela's interim government says it will bring billions in investment and tax revenues. But critics argue the country has effectively handed away a fifth of its oil reserves, sparking a fierce debate over who really benefits. We will hear about the details in just a moment, but first let's hear from some people that have skin in the game. Ali Meshiri is CEO of Amos Global Energy and also a former president of Chevron Latin America.

**Ali Meshiri** (1:50)
Definitely. You know, if you look at Venezuela, Venezuela got the largest resource.
It's about 300 billion barrels of light, heavy, and extra heavy oil. And if you look at it in the past, the economy of the Venezuela has been driven by the oil sector. The GDP of Venezuela was close to $400 billion in 2010, and oil prices were somewhere around $80.
And they were producing a little bit over 2.5 million barrels. Definitely the silver bullet for the recovery of the economy of Venezuela, it comes from the oil sector. It has been in the past, it's going to be in the future, and I think that's going to be the source that can jumpstart the economy.

**Vishala Sripatma** (2:37)
So currently, Venezuela produces around 1.2 million barrels a day of oil.
In its hay, it produced around 3.7, so clearly, there is some ground to make up there. How can it get its infrastructure up to speed? And also, how much is it going to cost?

**Ali Meshiri** (2:54)
There's got to be an incremental production increase. It started increasing the production above 1.5.
Then you're dealing with some of the infrastructure that the capacity has been declined significantly in the last 10 years. Whether or not it's the terminal, whether or not it's pipeline or the gathering facility. What we have estimated to get the production to 1.5 million barrels, probably you need somewhere between 3-4 billion dollars. Trying to increase the production from 1.5 to 2.5 million barrels a day, you need significant amount of investment, close to 50 billion dollars. Does the oil sector in 1.5 million barrels production can generate that kind of revenue and capital to be able to fund, to increase the production? The answer to that is yes.

**Vishala Sripatma** (3:48)
So Ali, rather optimistic there about oil revenues returning to the domestic economy and also becoming a success for Venezuela. Well, Ruth de Crivois is an economist and also a former central bank governor of Venezuela. She's a little more sceptical.

**Ruth de Crivois** (4:05)
The recovery of the oil industry is indispensable, but in itself, it is not enough.
Because a monodependent economy on oil is highly vulnerable to shocks, getting the oil industry off the ground is needed because that's the only thing we have in the short term. But Venezuela needs to diversify its economy. Otherwise, we are stuck in a bad place. The legal framework has been reformed, but the perception is that we will have to go through a new reform by the end of next year, if we want production to move beyond 1.5 million barrels a day. Companies are interested in Venezuela. Many MOUs, but so far, not enough real money coming in. Migration from the old system to the new system has ended up largely as an allocation of fields to companies that have claims against PDVSA.
And there are signs of tensions within the Venezuelan bureaucracy. That means that oil production is slow, and non-oil activities are slow, and the quality of life is not good.

**Vishala Sripatma** (5:27)
So that was Ruth de Crivois, an economist and also former Central Bank Governor of Venezuela, listening to that as Francisco Rodríguez, a Senior Research Fellow at the Center for Economic and Policy Research. Thank you for joining us.