Jorge Piñon: I think that’s the key word: control. Venezuela’s oil reserves, like most oil reserves in the world — subsurface geological reserves — belong to the country. They do not belong to a private company or a private enterprise. In fact, in Venezuela, it is very clear. The constitution basically says that the geological reserves of oil and natural gas belong to the state, period, end of story. What it seems has happened is that a concession has been signed, which is typical in an industry.

And a concession could very well be a production-sharing agreement in which a company guarantees that it’s going to drill or invest X amount of money in developing the oil in a particular block, in this case, in the Orinoco [river].

But I think what’s very clear for all of us to understand is this does not involve the geological reserves of oil of the state of Venezuela. That’s national. Nobody can touch it but the country. It’s a constitutional issue. What has happened is very typical in our business. A company or a private enterprise has signed a concession with the state to develop some of those resources; in this case, 17 oil fields, which it seems have approximately 65 billion barrels of oil.

Where is the agreement? There is no transparency. As long as we — the press and the public and so on — don’t have a physical copy of the agreement with three signatures at the bottom, everything that we’re talking about is really just pure speculation. A concession or a production-sharing agreement is very common. This one supposedly was signed for a period of 25 years. It includes 17 oil fields.

So, these are fields that were producing, are now shut down for technical reasons or lack of maintenance, and [will] be restarted by this new company. And then the other ones are eight greenfield projects, and those are brand-new blocks in the Orinoco that have [not yet] been developed. And those will take years, by the way, to develop.

Who are the signatories? So far, what we have received from Washington is that the United States is a signatory to this agreement. I am not aware that the United States has an oil company, just like Petrobras in Brazil or Pemex in Mexico, or so on. So, what US entity — if the United States did sign this agreement — what entity? Was it the Department of Commerce? Was it the Department of Energy? Who signed the agreement on behalf of the US? What is the US role? And the same thing: the role and the participation of the private sector.

Reportedly, there was one; some people say there are more than one small, medium-cap US oil companies that are going to do the work. The main question today is: Who signed the agreement on behalf of the United States? And what is the counterparty? Who is the other company that, with the United States, is going to develop these fields?

Well, that’s the main question that we have. By the way, the $100 billion is a back-of-the-envelope figure. I cannot believe somebody has done the due diligence we in the industry are used to doing on a project like this. You just don’t come up with a number like this in a matter of weeks. How are you going to project the investment needed in eight greenfield blocks? There are eight fields in which we don’t have any idea because nobody has ever developed those fields.

By the way, those eight greenfields, there are two fields in that block that already belong to China and to an Italian oil company. There’s also going to be a lot of questions in Lake Maracaibo. There is the Lagunillas [Oil] Field, which is 40% Belorusneft, which is a Russian company. So, it’s very, very difficult for us to really give a proper analysis to the deal if we don’t have a copy of it. The other question that we are asking is politically, is the United States going to be able to play nice ball with China and Russia and the Italians and all of the companies that are already active in Venezuela?

Please remember that this is extra-heavy oil from the Orinoco. This is oil that needs diluents. That’s a lighter product, like naphtha, for example, injected into the well to lower the viscosity to a point where we can get it out of the ground. So, it’s a very complex process. And then also the administration just recently said that part of that oil is going to go into the SPR, that is, Strategic Petroleum Reserve.

I have never heard of an extra-heavy oil going into the SPR. The SPRs are these huge salt caverns, four of them, that we have in Texas and in Louisiana, where we store light and medium crudes in the case of a national emergency. You cannot store heavy Orinoco oil and then mix it and blend it with this medium-high-quality crude, because eventually it’ll be very difficult, if not impossible, to pump out.

So, the fact that somebody said in the White House, or in Washington, that part of that oil is going to go to the SPR, that it’s going to replace some of the oil that was taken out in March by this administration out of the Strategic Petroleum Reserves, that’s wrong. You can’t do that. Again, it shows a lack of knowledge as far as the industry is concerned.

Yes. And then the main question that the big multinationals, like Exxon and others, have is, “What if, in about a year or two, there are free elections in Venezuela, a new national assembly is elected, a new government takes place, and a new judiciary takes over? What if they decide to play under different rules? And they, the new government in Venezuela, will say, ‘Sorry, but all of the agreements that the previous government agreed to are null. They’re not valid.'” That’s the situation that the big oil companies are in. That’s why big oil companies want continuity. They don’t like changes. They want to sign a deal, sign the bottom line, and then begin investing the billions of dollars that it will take for them to recover their investment and the years that it will take to recover their investment.

They cannot afford this change of governments every couple of years and the changing rules of the game. They need political continuity. That’s why you don’t have an Exxon. That’s why you don’t have other major oil companies in play today. That’s why I want to see the agreement. I want to see who signed the agreement. Is there really an oil company that signed this agreement? And does that oil company have the expertise to drill for heavy oil? Do they have the safety stewardship and safety concerns about how to operate a field? Do they have deep pockets in order to pay for a possible oil spill? You just don’t award a concession to any, excuse my words, Mickey Mouse company.

This is not a little deal. These are big deals with big responsibilities. No other company can sign a deal like this unless it’s a respectable, deep-pocketed, well-experienced oil company. Where is the agreement? I question whether there is an agreement.