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BONUS: US Energy Secretary Chris Wright Talks Venezuela Oil Production · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts.
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  Speaker 1: Radio. News.
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  Speaker 3: U.S.
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  Speaker 2: Energy Secretary Chris Wright is in Venezuela to announce a
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  Speaker 2: series of deals from oil producers. Bloomberg Washington correspondent Tyler
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  Speaker 2: Kendall is in Caracas with him.
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  Speaker 1: Tyler?
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  Speaker 3: Thanks so much and a big welcome to our global
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  Speaker 3: Bloomberg television and radio audience. I'm Tyler Kendall here in
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  Speaker 3: Venezuela and pleased to say I'm joined now by the U.S.
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  Speaker 3: Energy Secretary Christopher Wright. Secretary Wright, it's nice to see
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  Speaker 3: you here on the heels of the U.S. government announcing
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  Speaker 3: this massive partnership to potentially develop up to 65 billion
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  Speaker 3: barrels of oil. Just to get a lay of the land,
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  Speaker 3: how quickly can you start production on those 17 fields?
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  Speaker 3: And more broadly speaking, how quickly will we see Venezuelan
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  Speaker 3: production output really ramp up?
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  Speaker 2: Well, several of those fields, Tyler, are already in active
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  Speaker 2: development today. NABEP produces around 200,000 barrels of oil a day.
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  Speaker 2: They're the second largest private producer in Venezuela. So there's
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  Speaker 2: scale already in several of those fields. A number of
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  Speaker 2: them haven't seen any meaningful development yet. Some of them
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  Speaker 2: were at Russian partnerships or Chinese partnerships or, frankly, criminal partnerships.
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  Speaker 2: So this is to bring these fields into real commercial development.
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  Speaker 2: But the speed of things, I mean, so far we
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  Speaker 2: have gone at Trump's speed in Venezuela. Country production's up 25%,
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  Speaker 2: exports are up 50%. We think even from production today
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  Speaker 2: already elevated, that could double by the end of this decade.
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  Speaker 3: 65 billion barrels is a massive number. It's my understanding
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  Speaker 3: that North American Blue Energy partners can't develop this all
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  Speaker 3: on their own. Are you actively working or in talks
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  Speaker 3: to bring in other operators for these 17 fields?
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  Speaker 2: Oh, I'm certain that will happen. But of course, the
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  Speaker 2: deal was just signed on Friday. So this is brand new.
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  Speaker 2: But yes, that reserve base is so large, clearly additional
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  Speaker 2: partnerships will be formed to develop those resources.
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  Speaker 3: When it comes to these specific fields, China is still
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  Speaker 3: owned billions of dollars from the Venezuelan government. Are there
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  Speaker 3: any assurances that the barrels from these fields aren't going
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  Speaker 3: to be used to pay back Chinese debt?
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  Speaker 2: Now look, Venezuela's got a lot of historical debt, and
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  Speaker 2: one of the major efforts going on right now is
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  Speaker 2: to do a debt restructuring, to get things in order.
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  Speaker 1: Who are the real creditors? What is an arrangement gonna
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  Speaker 1: go to move forward?
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  Speaker 2: But no, these fields will be developed for the benefit
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  Speaker 2: of the Venezuelan people, for the benefit of Americans, and.
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  Speaker 1: For the benefit of global energy markets.
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  Speaker 2: President Trump's agendas drive down energy prices of all kinds
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  Speaker 2: across our economy and across the world.
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  Speaker 3: But just for clarity, China won't have any claims of
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  Speaker 3: production or revenue related to this deal.
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  Speaker 1: That the U.S. government struck? No, no, they will not.
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  Speaker 3: Broadly speaking, people familiar with the matter have told Bloomberg
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  Speaker 3: News that Venezuela is considering actually leaving OPEC.
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  Speaker 1: Have you had any of.
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  Speaker 3: Those discussions with the Venezuelan government, including when it comes
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  Speaker 3: to talks around this deal?
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  Speaker 1: I have not discussed OPEC with the leaders of Venezuela.
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  Speaker 3: Do you think that they should leave?
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  Speaker 2: That's a dialogue for the sovereign state of Venezuela.
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  Speaker 1: That's a decision for them to make.
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  Speaker 3: But I think part of this question is that wouldn't
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  Speaker 3: it be difficult for the U.S. government to take all
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  Speaker 3: of this oil as part of the deal if Venezuela.
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  Speaker 1: Is subject to OPEC quotas?
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  Speaker 3: I know at the moment they're not, but if we're
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  Speaker 3: talking about ramping up so much production— in this country,
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  Speaker 3: wouldn't they be down the line?
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  Speaker 1: Again, that's a separate issue.
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  Speaker 2: But also, Tyler, to be clear, we're not taking any
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  Speaker 2: oil here. This is a deal between a commercial enterprise
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  Speaker 2: that's operating in Venezuela today. We're just coming in as
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  Speaker 2: a partner, a passive partner in that role. but with
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  Speaker 2: very active controls to make sure highest business practices are
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  Speaker 2: followed and to work with them to bring more capital
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  Speaker 2: so we can accelerate the development of these reserves.
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  Speaker 1: Venezuela today has.
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  Speaker 2: About 17% of global oil reserves and just over 1%
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  Speaker 2: of global production. That's the problem of the last 25 years,
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  Speaker 2: but it's the opportunity for tomorrow.
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  Speaker 3: Well, to this point, we've often heard from the administration
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  Speaker 3: about this three-phased approach when it comes to to Venezuela
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  Speaker 3: that includes stability, economic viability, and then a democratic transition.
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  Speaker 3: Can you just talk to me about how you are
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  Speaker 3: viewing this part of the picture, how this helps to
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  Speaker 3: get Venezuela to that process of economic viability before we
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  Speaker 3: could see duly elected officials in this country in terms
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  Speaker 3: of a democratic process?
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  Speaker 1: Absolutely. Stability is key.
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  Speaker 2: You can see in the streets behind us here in Caracas,
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  Speaker 2: we have peace and stability in Venezuela.
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  Speaker 1: We need to make sure it stays that way. But
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  Speaker 1: to get.
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  Speaker 2: Economic growth, you have to have an investment climate that
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  Speaker 2: American companies and companies from around the world will come
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  Speaker 2: invest in this country.
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  Speaker 1: A U.S.
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  Speaker 2: Presence, now an economic ownership interest in Venezuela, I think
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  Speaker 2: will help.
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  Speaker 1: Grow that confidence and bring even more capital.
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  Speaker 2: But today, the deal signed with Chevron, with ENI, the
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  Speaker 2: Italian multinational giant, and GE Vernova, these are all many
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  Speaker 2: billions of dollars of investment to grow their businesses in Venezuela.
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  Speaker 2: We expect many more such deals to come.
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  Speaker 1: Is continued U.S.
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  Speaker 3: Investment or participation in this oil agreement conditional on any
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  Speaker 3: progress towards those Democratic talks. I know that talks are
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  Speaker 3: currently underway.
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  Speaker 2: The economic deals are separate than the political thing, but
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  Speaker 2: they're all part of the same whole. President Trump's sort
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  Speaker 2: of global agenda is to replace conflict with commerce all
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  Speaker 2: around the world.
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  Speaker 1: And boy, I think we're off to an.
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  Speaker 2: Absolute swimming start in Venezuela. I'll tell you, the Venezuelan
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  Speaker 2: people are behind us. 25 years of communist corruption, poverty,
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  Speaker 2: 8 million people fleeing the country. Now we're going to
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  Speaker 2: show the prospect of economic growth, of new jobs, bring
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  Speaker 2: inflation down, and bring our countries together. And the growth
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  Speaker 2: in production in Venezuela, simply tremendous for America. Our refineries
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  Speaker 2: were built based on Venezuelan oil. Now as that crude
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  Speaker 2: production grows in quantity, that's a win for Venezuela. It's
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  Speaker 2: a massive win for energy buyers in the United States,
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  Speaker 2: whether you're buying gasoline or diesel or flying out on
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  Speaker 2: a vacation or heating your home.
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  Speaker 3: I think I know the answer to this. Just last
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  Speaker 3: question on this, just to put a finer point on it.
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  Speaker 1: Would the U.S.
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  Speaker 3: Suspend any investment or oil purchases if the current political
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  Speaker 3: talks end up failing?
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  Speaker 2: These are ways to make sure the political talks go forward.
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  Speaker 2: Things are progressing quite well on the political front. We've
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  Speaker 2: had reconciliation meetings with the previous leader of the Venezuelan
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  Speaker 2: Assembly from.
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  Speaker 1: 11 years ago. His meeting with the current assembly leader.
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  Speaker 2: We've seen the release of over 100 political prisoners, additional
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  Speaker 2: from the early releases. The political talks are going well,
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  Speaker 2: as well as the economic talks.
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  Speaker 3: Another question on how this deal is coming together in
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  Speaker 3: terms of helping to refill the Strategic Petroleum Reserve. Can
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  Speaker 3: you just take me through how that's going to work?
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  Speaker 3: Are we looking at swapping this crude to get it
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  Speaker 3: into the SPR?
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  Speaker 2: Yeah, as you grow production and lower the price of oil,
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  Speaker 2: that enables everything to be better.
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  Speaker 1: But absolutely, you know, the U.S.
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  Speaker 2: Strategic Petroleum Reserve, it's unlikely that we would put Venezuelan
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  Speaker 2: crude into our Strategic Petroleum Reserve.
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  Speaker 1: But it's the largest market in the world, oil.
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  Speaker 2: As we did with the conflict in Iran right now,
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  Speaker 2: we swapped barrels in time. We released a barrel at
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  Speaker 2: the peak of this crisis for a promise of 1.25
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  Speaker 2: barrels later in time.
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  Speaker 1: You can also swap grades of crude.
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  Speaker 2: We could swap Venezuelan crude for American light and mid-grade crudes.
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  Speaker 1: So yeah, great flexibility there.
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  Speaker 3: A big part of the conversation about bolstering supplies in
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  Speaker 3: the Western Hemisphere has to do with the fact that
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  Speaker 3: we're seeing disruptions when it comes to the Middle East.
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  Speaker 3: And your counterpart at Treasury, Secretary Scott Besson, said yesterday
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  Speaker 3: that he thinks that the Strait of Hormuz will be, quote,
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  Speaker 3: worthless in two years as oil finds. these other bypass
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  Speaker 3: pipelines and routes. Do you agree with that assessment?
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  Speaker 2: Yeah, as the infrastructure is built, you just get more
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  Speaker 2: and more ways for those barrels to reach the marketplace.
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  Speaker 2: Iran has played this card to try to hold the
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  Speaker 2: world hostage, thinking, oh, everyone will bend to Iran's needs.
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  Speaker 1: That's nonsense.
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  Speaker 2: On Monday, the United States Navy escorted over 17 million
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  Speaker 2: barrels of crude oil floating out of the Strait of Hormuz.
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  Speaker 2: That's above the levels that floated out of the Strait
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  Speaker 2: of Hormuz pre-conflict.
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  Speaker 3: So you still see the Strait as being a very
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  Speaker 3: important lifeline for oil to get to market, even as
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  Speaker 3: we see a boost in infrastructure developments to try to
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  Speaker 3: find these other routes?
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  Speaker 2: Well, as Secretary Bassett said, there's going to be alternative
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  Speaker 2: pathways as well.
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  Speaker 1: You can't have too many eggs in one basket.
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  Speaker 2: Maybe the world had that with the Strait of Hormuz,
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  Speaker 2: but President Trump is changing that.
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  Speaker 1: Yes, new pipelines will be built.
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  Speaker 2: Existing pipelines will be expanded to reduce Iran's future leverage
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  Speaker 2: ever to use the Strait of Hormuz again. But the
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  Speaker 2: United States Navy right now is overwhelming Iranian attacks and
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  Speaker 2: getting oil and gas out to the marketplace today.
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  Speaker 3: In the final minute, I have you just to tie
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  Speaker 3: it all together. Does this agreement today or any agreements
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  Speaker 3: or talks that you're having with the Venezuelan government in
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  Speaker 3: the future address the country's ties when it comes to Iran?
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  Speaker 3: For example, we've seen this be a base for their
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  Speaker 3: proxy militias in this hemisphere.
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  Speaker 1: Oh, yes, this is key.
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  Speaker 2: Number one, a lot of the blocks that are included
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  Speaker 2: in this deal were previously developed by Russians, you know,
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  Speaker 2: or Chinese, or frankly, criminal gangs.
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  Speaker 1: That were associated with Maduro.
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  Speaker 2: We're taking a lot of reserves that were corruptly developed
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  Speaker 2: for no benefit of the Venezuelan people and certainly encouraging
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  Speaker 2: criminality in the Western Hemisphere. We're displacing those hostile foreign actors,
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  Speaker 2: bringing in American companies, American businesses, and rule of law.
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  Speaker 1: I don't think the world has ever.
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  Speaker 2: Seen the kind of transformation we're seeing in Venezuela right now.
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  Speaker 2: No American boots on the ground. That's President Trump's leadership.
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  Speaker 2: Commerce over conflict.
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  Speaker 3: All right, that's all the time we have for now.
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  Speaker 1: The U.S.
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  Speaker 3: Energy Secretary Christopher Wright, thank you so much for joining
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  Speaker 3: us here.