Clifford F. Thies
In his press conference on January 3 concerning the arrest of Venezuelan “narco-dictator” Nicolas Maduro, President Donald Trump talked about US oil companies restoring the former productivity of Venezuela’s oil industry and using that money for 1) compensation for the nationalization of the industry a couple decades ago; and, 2) (somehow) benefiting the people of Venezuela.
First, regarding the fall in the productivity of Venezuela’s oil industry, production fell from a peak of 3 million barrels a day twenty years ago to less than half a million barrels a day recently.
This fall in oil production reflects the long-term effects of the nationalization of the industry. When he nationalized the industry, Hugo Chavez looked at Venezuela’s oil industry as a source of funds to provide relatively generous welfare benefits to the urban poor of the country, assuring that he would win re-election.
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