Energy Dept. draws fire for slow pace of Venezuelan oil deals

Nearly eight months after President Trump predicted U.S. companies would "rapidly rebuild Venezuela's dilapidated oil industry" to boost production, no new petroleum deals have been finalized there with American firms.The U.S. Department of Energy is largely to blame, a dozen oil industry professionals, senior U.S. officials and Venezuela insiders tell Axios.Why it matters: The price of oil is climbing as the Iran war squeezes global supplies, spotlighting the absence of finalized deals in Venezuela — a nation with the highest estimated petroleum reserves on the planet."We have no new concessions. No new deals. It is absolutely a problem," a senior U.S. official told Axios. "The Energy Department is in charge of this and they have some explaining to do."The Energy Department and its defenders call the criticisms misleading and unfair.Zoom in: Developing oil in Venezuela is challenging because of the legacy of mismanagement and nationalization efforts under its two prior socialist strongmen, Hugo Chavez and Nicolas Maduro.Maduro was ousted by U.S. forces Jan. 3. Six days later, Trump met with oil industry officials and said the U.S. is "going to be making the decision" about which firms would help "rapidly" rebuild in Venezuela."You're dealing with us directly," Trump said. "You're not dealing with Venezuela at all. We don't want you to deal with Venezuela."Between the lines: Trump's promise was hampered by two divides — one in his own government; the other in the oil industry.The oil industry is separated between major global firms that move relatively slowly and deliberatively, and smaller independent firms — nicknamed "wildcatters" — known for their speed and higher risk tolerance.The "majors," like Exxon and ConocoPhillips, publicly made clear they were cool to the idea of going back to Venezuela because of all the uncertainty. But several wildcatters were eager to get in.Trump's administration, meanwhile, is split between MAGA types and regulatory professionals.MAGA loyalists want Washington to heed what Trump said Jan. 9 and force Venezuela's state-run oil company, called PDVSA, to quickly adopt common international industry contracting standards.The more cautious bureaucrats in the Energy Department, who have relatively little international oil-industry experience, advocated for a slower process, working more collaboratively with Caracas. A new complication: Two earthquakes June 28 badly damaged Venezuela. Discontent there is rising.Friction point: Trump's former top adviser in Venezuela, Mauricio Claver-Carone, accused the Energy Department of favoring the major oil companies over the wildcatters."Starting January 4th, it should have been carte blanche for all American producers to take risk. That's America First," Claver-Carone told Axios."Instead, American wildcatters got stuck with onerous conditions and a competitive disadvantage versus the mostly foreign majors that were in bed with Maduro."Over time, more wildcatters aligned with MAG