Make oil rules investor-friendly or lose out to Guyana – US Secretary of State tells Venezuela

United States Secretary of State Marco Rubio has called on Venezuela to reform the business climate there, warning that foreign investors could turn to other countries like neighbouring Guyana, which offers a much stronger and more reliable investment environment.
Rubio made these remarks on Wednesday during an appearance before the Senate Committee on Foreign Relations on the US policy towards Venezuela after the toppling of the Nicolás Maduro regime.
On January 3, the Venezuelan leader Nicolas Maduro and his wife were captured in Caracas by the US military and taken to New York, where they have been indicted on drug trafficking and narco-terrorism charges. Vice President Delcy Rodriguez has since been sworn in as Venezuela’s interim President after Maduro’s ouster.
President Donald Trump has been pushing US oil companies to invest in Venezuela’s vast oil reserves, despite decades of mismanagement, underinvestment and a still uncertain political climate.
Previously, foreign oil companies operating in Venezuela, which has the largest proven oil reserves in the world, had left after the industry was nationalised and the state subsequently controlled production.
However, based on international reports on Thursday, Venezuela’s National Assembly approved sweeping reforms of the country’s oil industry that will allow foreign companies more control over their operations. It was reported that once the new law is signed off by the country’s interim President, it is expected to pave the way for more foreign investment in the oil industry.
But during Wednesday’s Senate committee hearing, Secretary Rubio was asked about security guarantees in place for investors to give them confidence to move on the opportunities in Venezuela.

The Secretary of State lauded Venezuela for hydrocarbon sector reform, pointing to the importance of having an investor-friendly climate in order to attract business.
“Venezuela has a lot of oil – they do. But there’s a lot of oil in other places too. Companies are only going to invent somewhere if they know, ‘We’re going to invest; we’re going to make our money back with a profit; and our land is not going to be taken from us, and if they try to, there is a court we can go to and contracts we can enforce.’”
“That’s the level of certainty we’re talking about in terms of security. And that’s part of this transition process. That’s part of this recovery process. It’s to normalise their industries because, if not, they’ll just invest the money in Guyana, or they’ll just invest the money in some other part of the world that has oil. They’re not going to risk it. So, it’s to their benefit to have set up a normal transparent process that encourages foreign investments – not just in oil, by the way, and other natural resources but in other segments of their economy,” Rubio told US lawmakers.
Currently, Guyana has one of the world’s fastest-growing economies, largely driven by its massive offshore oil discoveries, and is seen as one of the major hotspots for foreign investments.
The Guyana Government has been encouraging foreign investments not only in the oil and gas sector but also in other industries as part of efforts to diversify the country’s economy.
Meanwhile, in his opening remarks at Wednesday’s Senate Committee hearing, Secretary Rubio stressed that the US was not at war with Venezuela, arguing that the attack was necessary given the “enormous strategic risks” the Maduro-led regime posed for the US and the hemisphere as well.
According to Secretary Rubio, the first objective of the US was to avoid a civil war, which was done by establishing “direct, honest, respectful but very direct and honest conversations with the people who today control the elements of that nation, meaning the law enforcement, the government apparatus, et cetera.”
One of the tools being used to achieve that stability objective, he explained, is the sanctions on Venezuela’s oil.
“So, what we did is we entered into an arrangement with them… On the oil that is sanctioned and quarantined, we will allow you to move it to market at market prices… In return, the funds from that will be deposited into an account that we will have oversight over, and you will spend that money for the benefit of the Venezuelan people,” the US official stated.
This arrangement, according to Rubio, is a short-term mechanism both to stabilise the country and also to make sure that the oil proceeds that are currently being generated through the licences that the US will now begin to issue on the sanctioned oil go to the benefit of the Venezuelan people.
The second objective is the period of recovery, which Rubio says is the phase in which they want to see a normalised oil industry.
“There’s plenty of oil all over the world… So it’s not like Venezuela’s oil is unique in that regard, despite the fact they have the largest known reserves in the world. It’s not irreplaceable. But we understand that that is the lifeline. Their natural resources are going to allow Venezuela to be stable and prosperous moving forward. And so…what we hope to do is transition to a mechanism that allows that to be sold in a normal way, a normal oil industry – not one dominated by cronies, not one dominated by graft and corruption,” the US Secretary of State noted.