Lot of reasons for concern about sanctity of contracts with Venezuela: MCC Global's Caruso-Cabrera

Summary

Michelle Caruso-Cabrera discusses the US-Venezuela oil deal from the G20 finance ministers meeting. She says the deal is being led by the Pentagon's private-equity-staffed Office of Strategic Capital, which may improve deal structure and finally start stalled US-Venezuela oil investment. She also argues that direct US government involvement could reduce contract sanctity risk for US oil companies like Chevron, ConocoPhillips, and ExxonMobil, though expropriation history and final contract details still leave concerns.

• The reported US-Venezuela deal could give the US majority control over up to 65 billion barrels of possible oil reserves.
• President Trump says Venezuelan oil would help refill the Strategic Petroleum Reserve, but insiders caution the deal could take years.
• Caruso-Cabrera says the Pentagon's Office of Strategic Capital is staffed with experienced private equity dealmakers.
• Venezuela's oil production has fallen from 3.2 million barrels per day in 1997 to just over 1 million.
• Chevron, ConocoPhillips, and ExxonMobil have prior expropriation claims in Venezuela.
• US government involvement could ease contract sanctity concerns, but final contracts and future political changes remain risks.
• The discussion also covers US energy reliance and the possibility that a future White House could alter the deal.