US Secretary of State Mike Pompeo: Western oil companies may return to Venezuela, US sanctions will continue until reform of the oil industry is implemented.

US Secretary of State Mike Pompeo said last Sunday that the Trump administration expects Western energy companies to show strong interest in returning to Venezuela, but did not specify whether the US would send troops to protect oil infrastructure. Pompeo said in an interview that the focus of the US government is not on physical control of oil assets, but on enforcing sanctions related to governance reforms in the country's energy sector. "This is not about ensuring the security of oil fields," Pompeo said. "It is about ensuring that any sanctioned oil cannot enter or leave until reforms in the entire governance of the sector are made." Pompeo said he has not spoken with executives of US oil companies in recent days, but the White House expects Western companies to show "great interest" if restrictions are eased. He added that private companies would be eager to re-enter the market under suitable conditions. "I think that given space and opportunity, the private industry will have a great demand and interest in participating," he said. Currently, Chevron Corporation (CVX.US) is the only US oil producer operating in Venezuela, based on a special license granted by Washington. Venezuela has the world's largest proven oil reserves and continues to export hundreds of thousands of barrels of oil daily. However, Pompeo stated that even after the overthrow of former leader Nicols Maduro, the US will maintain a strict enforcement position on sanctioned Venezuelan oil. "If you are a sanctioned ship and are heading to Venezuela, you will be detained on your way in or out," he said, describing the "devastating" impact of the sanctions on the former Maduro government. Pompeo painted a bleak picture of the country's oil industry, claiming that it has essentially collapsed under years of mismanagement and corruption. "These oil fields have basically been run like pirates," he said. "A small group of people have been siphoning oil directly from underground, benefitting from these specific oil wells. With dilapidated equipment, their production capacity is probably only around 18%, and they basically pocket the money. They sell oil on the global market at discounted prices, you know, about 40 or 50 cents on the dollar." He added that over the years, Venezuela's energy wealth has not benefited the average citizens. "These oil fields have not benefited the Venezuelan people in the past decade. They have only made a few individuals millionaires and billionaires. This is why this regime has been able to sustain itself. This is the problem that needs to be addressed," Pompeo said. According to Pompeo, US sanctions will continue until the Venezuelan oil industry is restructured to serve the general population, not just entrenched elites. "For the benefit of the Venezuelan people, the way to solve this issue is to allow private companies - not companies from Iran or elsewhere - to enter and invest in infrastructure," he said, "the people who do these things know how to do it."