00:00Good to see you again, Gaurav. So we heard that some of the scepticism, as Nick described it,
00:04from the oil companies. What are the challenges surrounding getting the oil in Venezuela out?
00:11One of them costs, of course, but what else could be the issues there?
00:16Good to be back on the program, Robin. I think if you look at things on an even key,
00:20it's not just about the money. You are looking at infrastructure that is practically on its knees.
00:26There are very few pockets of Venezuelan infrastructure that by industry standards would be deemed to be up to scratch.
00:34Now, layered on top of that is the uncertainty. Then there's a financial commitment.
00:40Then there's a physical commitment and the time lag.
00:43Now, would big oil really step into the breach as President Trump wants them to?
00:48They're driven by the spirit of private enterprise. So they'll have to spend time, money, and there's quite a lot.
00:55Now, there are loads of figures being brandished, about $10 billion, $15 billion, $20 billion.
01:00Who knows? Because an accurate assessment has not been carried out of the state of Venezuela's infrastructure since 2008.
01:08So why has Venezuela's oil infrastructure become so degraded?
01:14So you see, when the Chavez administration kicked off, he came in, Venezuela's infrastructure was in a very good state.
01:22It was exporting to the world, pumping 3.5 million barrels per day, as your colleague just alluded to.
01:27Now, what we had then was that the president then tried to sort of buttress in and use it for social programs, so on.
01:36Yet at the same time, there was mismanagement and they didn't handle things well.
01:40Now, when that starts to happen, infrastructure investment declines because it all becomes about margins and selling oil rather than trying to serve its infrastructure, keep it up to scratch.
01:51And hence the problems we are seeing today.
01:54Then, on top of that, the United States started imposing sanctions, which carried on for a number of years, which made a bad situation worse.
02:02Nevertheless, it is a big reserve, isn't it, that Venezuela has.
02:07How valuable could it be?
02:08What kind of opportunity could that reserve represent?
02:12I'd say, Robin, a bit of caution is merited here.
02:16I appreciate that the 300 billion barrels worth of reserves are being talked about.
02:21But these are Mr. Chavez's figures dating back to 2008.
02:25Let's take it at face value that those reserves are there.
02:27Having them in the ground and taking them out of the ground at a very competitive price remains a challenge and will remain a challenge.
02:35So I don't think it'd be quite the bonanza that some people think, including the U.S. president.
02:40I think those reserves were sort of calculated at the time when oil prices were $140.
02:45Today we're languishing in the 60s.
02:48And they may not be realized.
02:50But, yes, it is indeed a substantial reserve.
02:54Gaurav, great to talk to you as always.
02:56This is Gaurav Sharma there, the independent energy analyst.
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