H/T to Non-Hyphenated American (@NHAunleashed on X) who works in the industry.
There are so many lies and myths being spread on X about the Venezuelan oil deal that it’s time to bring facts to the table.
A lot of the myths are being spread by Con Inc grifters which have zero clue about the oil and gas industry but overnight became experts on the very complex value stream of oil and gas exploration, production, transportation and refining.
Rystad Energy is the industry gold standard for analysis and in my long career in oil and gas I have used their information for well over a decade as does every major oil company across the planet.
The link to the report is at the bottom. Please read if you want to learn about this issue with the most credible facts you can find.
Short term ( next 3-5 years) the best you can expect is about 250,000 BPD with an investment of about $15 billion.
To get anywhere close to the 3 million BPD (up from the currrent about 1 million BPD) which VZ used to produce in the mid 90’s it will take over $100 billion and well into the late 2030’s to be realized. More specific numbers are about $185 billion in cap ex over 15 years FTA.
That’s assuming there is political stability in the region which is a big IF.
Venezuelan oil is close to tar and it’s among the most expensive in upstream costs (exploration and production) , midstream (transportation in pipelines as it has to be diluted from the sludge it is) and even downstream (refining and last mile transport) due to the complex refining processes needed for this kind of oil.
US refiners are at near full capacity for heavy oil.
So now we would need to build new refineries in the US for this very heavy oil which would take 5-10 years and multiple billions with a low ROI and a very complex regulatory environment and capital markets hesitant to fund this.
Oh and for all this to happen and the ROI to make sense the oil prices have to stay well above $80 for a decade for this to come true. If oil prices were to fall to $60 ( they won’t) then none of this makes financial sense so it won’t happen.
TL : DR
This will have NO immediate impact to your price of gas at the pump.
Maybe 20-40 cents a gallon within 3-5 years best case.
Well over a decade for any further drop in gas prices because of increased supply from Venezuela.
