US President Donald Trump announced that Venezuela will turn over up to 50 million barrels of oil to the US, with plans for the US to control oil sales indefinitely. However, US oil companies may be hesitant to accept the opportunity due to the technical challenges and political risks of operating in Venezuela.

Venezuela has the largest crude reserves in the world, but extracting its oil is costly and challenging. The country’s oil industry has faced nationalization and difficulties, leading to reduced production levels. Investments of $100 billion are required to revive Venezuela’s oil production to its peak levels.

Venezuela’s oil is extra-heavy crude, which requires advanced techniques for extraction and refining. The breakeven cost for Venezuelan oil is high, making it uneconomic at current oil prices. There is uncertainty around the actual reserves in Venezuela, with estimates varying and the need for higher oil prices for economic extraction.

The Trump administration is offering security guarantees but no financial assistance for oil projects in Venezuela. Political risk and challenges in foreign investment make the revival of the Venezuelan oil industry uncertain. The dream of a transformational influx of Venezuelan crude may remain elusive due to the complex realities of the situation.

Read more at Yahoo Finance: Trump’s Venezuela Oil Plan Runs Into Hard Reality