Raphael John-Lall

De­spite the threat by the Trump ad­min­is­tra­tion to end all oil and nat­ur­al gas agree­ments ap­proved by the pre­vi­ous US gov­ern­ment for Venezuela, a top econ­o­mist in that coun­try re­mains op­ti­mistic that all is not lost for Venezuela, the coun­try with the world’s largest re­serves of oil.

On Thurs­day, Venezue­lan econ­o­mist Luis Vi­cente Leon did an analy­sis, which he post­ed on his X so­cial net­work, fol­low­ing US Sec­re­tary of State, Mar­co Ru­bio post­ing on X on Thurs­day that he was “pro­vid­ing for­eign pol­i­cy guid­ance to ter­mi­nate all Biden-era oil and gas li­cences that have shame­ful­ly bankrolled the il­leg­ti­mate Maduro regime.”

The T&T Gov­ern­ment has been plan­ning to re­quest an ex­ten­sion from the US Gov­ern­ment for the li­cence grant­ed to Shell and the state-owned Na­tion­al Gas Com­pa­ny (NGC) to de­vel­op the Drag­on gas field in Venezuela, ac­cord­ing to a Reuters re­port on Tues­day. The OFAC li­cence ex­pires in Oc­to­ber 2025.

The li­cence, ini­tial­ly is­sued in ear­ly 2023, al­lows the com­pa­nies to pro­ceed with plan­ning the project, which aims to sup­ply gas to Trinidad by 2027.

De­spite the lat­est anounce­ment, Leon ar­gued that the “game is not over” for Venezuela and jus­ti­fied why “the game has just be­gun.”

“Amid the heat­ed de­bate over the bud­get in the Unit­ed States, Pres­i­dent Don­ald Trump has de­cid­ed to sus­pend Chevron’s li­cence as of March 1, which un­doubt­ed­ly pleas­es hard­line Amer­i­can rep­re­sen­ta­tives and guar­an­tees sup­port for his bud­get pro­pos­al. But this move does not mean that the game is over. On the con­trary, the game has on­ly just be­gun. The de­ci­sion leaves six months for the pe­ri­od of dis­man­tling the com­pa­ny’s reg­u­lar op­er­a­tions (wind down), dur­ing which it will con­tin­ue to pro­duce and ex­port legal­ly, while it plans its ces­sa­tion of op­er­a­tions or ne­go­ti­ates its per­ma­nence based on oth­er dif­fer­ent con­di­tions.”

Leon al­so said there is no in­di­ca­tion that this de­ci­sion will af­fect, for now, the op­er­a­tions of the oth­er in­ter­na­tion­al en­er­gy com­pa­nies with ac­tive li­cences, which do not ex­pire this year, and there is no talk yet of re-im­pos­ing sec­ondary sanc­tions.

“Dur­ing these six months, the ne­go­ti­a­tion pe­ri­od be­tween the gov­ern­ments of the Unit­ed States and Venezuela opens to de­fine the way in which the oil re­la­tion­ship will be man­aged. In the wake of the gen­er­al li­cence, which had been can­celled pre­vi­ous­ly, the Amer­i­can Gov­ern­ment ap­proved a list of in­di­vid­ual li­cences (cur­rent­ly in force) that re­placed the gen­er­al can­cel­la­tion and cre­at­ed a new frame­work for the re­la­tion­ship, which is cer­tain­ly pos­i­tive for the Unit­ed States, giv­en that each li­cense grant­ed to the pri­vate sec­tor rep­re­sents an in­crease in its in­flu­ence and con­trol over the lo­cal en­er­gy sec­tor. It is now, in these six months, where the re­al ne­go­ti­a­tions be­tween Trump and Venezuela’s Pres­i­dent will take place.”

He said it is ob­vi­ous that Trump is a prag­mat­ic and ne­go­ti­at­ing pres­i­dent and what Venezue­lans are go­ing to see in this pe­ri­od are his con­crete re­quests.

“The crit­i­cal ques­tions at this point are: How will the Venezue­lan Gov­ern­ment re­act to this new U.S. pres­sure strat­e­gy? Will it seek so­lu­tions that open the door to ne­go­ti­a­tions or will it launch its Plan B, which would mean the im­me­di­ate de-West­ern­i­sa­tion of the Venezue­lan oil in­dus­try, hand­ing over the fields sus­cep­ti­ble to Trump’s de­ci­sions to Chi­na, Rus­sia, Iran and oth­ers, with which it al­ready has oil trade re­la­tions based on pay­ment mech­a­nisms free of block­ades, which it has learned to use in these last years of sanc­tions?”

He al­so raised the is­sue of whether Trump will fo­cus his de­mands on Venezue­lan Pres­i­dent Nicolás Maduro on trans­ac­tion­al el­e­ments that are tru­ly ne­go­tiable to­day, such as the mi­gra­tion is­sue, po­lit­i­cal pris­on­ers, the re­duc­tion of Chi­nese par­tic­i­pa­tion in Venezuela, and some el­e­ments of de­moc­ra­ti­sa­tion that do not rep­re­sent a sig­nif­i­cant risk of los­ing pow­er for Maduro.

Leon ar­gued that if Maduro goes in that di­rec­tion, the prob­a­bil­i­ty of suc­cess is high and rapid, or, on the con­trary, will Trump di­rect his de­mands to­ward an im­me­di­ate change of gov­ern­ment, some­thing that ex­pe­ri­ence in­di­cates will block any will­ing­ness to ne­go­ti­ate on the part of Maduro and the mil­i­tary sec­tor. Venezuela’s mil­i­tar are like­ly to be a thou­sand times more will­ing to ini­ti­ate their Plan B of to­tal clo­sure of op­po­si­tion po­lit­i­cal par­tic­i­pa­tion and eco­nom­ic de-West­ern­iza­tion than to lose pow­er with in­fi­nite ex­it costs for them and the en­tire rev­o­lu­tion?

“It is ob­vi­ous that the best sce­nario (pos­si­ble and achiev­able, not the­o­ret­i­cal and pas­sion­ate) for Venezuela and the Unit­ed States is to reach a new agree­ment that al­lows the coun­try to con­tin­ue par­tic­i­pat­ing in the West­ern en­er­gy mar­kets. The greater the pri­vate par­tic­i­pa­tion, with full trans­paren­cy of op­er­a­tions, an­ti-cor­rup­tion con­trols and avail­abil­i­ty of in­ter­na­tion­al re­sources for in­vest­ment, the bet­ter the con­di­tions will be to con­tin­ue the ef­fec­tive strug­gle in the po­lit­i­cal field. On the con­trary, cross­ing the bor­der in­to rad­i­cal­i­sa­tion will on­ly lead us to the worst sce­nario of eco­nom­ic and po­lit­i­cal ‘Ira­ni­an­i­sa­tion’ of the coun­try.

“I have no idea where this will end, but I hope that pas­sions and pres­sures do not lead us, once again, to the de­te­ri­o­ra­tion of the lives of the peo­ple and the coun­try, with no re­al pos­si­bil­i­ty of pro­duc­ing a po­lit­i­cal change, which nev­er oc­curs in the econ­o­my, but al­ways in so­ci­ety.”

Could go ei­ther way

Lo­cal econ­o­mist Dr An­tho­ny Gon­za­les told Guardian Me­dia that the sit­u­a­tion is not as bad as it seems.

“Noth­ing was al­so said about the Eu­ro­pean com­pa­nies that are al­lowed to op­er­ate in Venezuela, so clear­er and more de­ci­sive ac­tion by OFAC ( the US Of­fice of For­eign As­sets Con­trol) is need­ed to give more in­sight as to where the US is head­ing on this. We al­so have to watch where the sit­u­a­tion is go­ing with the Venezue­lan mi­grants. In these con­di­tions, an OFAC re­new­al for Drag­on gas still re­mains a fifty-fifty chance.”

Al­ter­na­tive mar­kets

Se­nior Venezue­lan jour­nal­ist, Miguel Án­gel Pérez, who is the founder of Venezue­lan me­dia out­let Igua­na TV, al­so did an analy­sis on his show “From Wher­ev­er” on Thurs­day night.

He ar­gued that Pres­i­dent Trump is giv­ing away the Venezue­lan en­er­gy mar­ket, with the largest re­serves on the plan­et, to Chi­na and its Silk Road project, and to the rest of the BRICS, an al­liance to which Venezuela will soon­er or lat­er be­long.

“The emerg­ing su­per­pow­ers will keep the oil that the US needs. Trump, in terms of en­er­gy, is shoot­ing him­self in the foot. He will have to turn it around, with­out los­ing face, in the si­lence of the ne­go­ti­a­tions. He will have to con­tin­ue buy­ing Venezue­lan oil,” he pre­dict­ed.