The Daily Journal.- U.S. Energy Secretary Chris Wright said the U.S. government’s participation in oil projects in Venezuela could help reduce political risk for investors and provide a measure of stability in the event of future changes in government.
Wright made the remarks during an interview with Charlotte Howard, U.S. editor of The Economist. His comments point to a strategic element of the new U.S. participation model in Venezuela’s oil sector: using Washington’s direct presence as backing to encourage new investment.
Wright argued that U.S. participation could give companies considering investments in Venezuela greater confidence, particularly amid concerns that future governments could change the conditions governing foreign investment.
“A significant U.S. presence in a country certainly gives you a little bit more security that, well, they’re probably not going to nationalize the investments three years from now after a different election,” he said.
Wright said Washington does not intend to operate the projects directly or compete with oil companies. Instead, the U.S. government would maintain an economic stake that, in his view, could provide greater stability.
“We are not the operator, nor do we compete with other oil companies; however, we have an ownership stake and an interest in it. I think that is a stabilizing factor,” he said.
A model Washington could extend
Wright also left open the possibility of applying a similar model in other oil-producing countries, provided that the arrangement benefits the parties involved and helps attract private capital.
“Are there other countries in the world that would like to have the U.S. government as a partner in their local production as a way to attract capital for commercial companies? Sure,” he said.
His remarks raise the possibility that U.S. energy policy could incorporate direct government participation as a tool to facilitate private investment in markets that investors consider politically risky.
Wright linked this approach to Ukraine, where U.S. companies participate in oil and gas exploration and production activities. According to Wright, the presence of U.S. companies in areas near potential ceasefire lines could have a deterrent effect, although he ruled out interpreting that presence as a military guarantee.
“Is that a deterrent? I think so. Is it a security guarantee? No,” he said.
The Energy Secretary stressed that U.S. participation does not constitute an explicit defense commitment, but argued that it could increase investor confidence.
