US needs to control Venezuelan oil sales, revenue, says energy secretary

The US needs to control Venezuela’s oil sales and revenue to drive the changes it wants to see in the country, Energy Secretary Chris Wright said on Wednesday.

Chris Wright said he was speaking to U.S. oil companies to learn what conditions would enable them to enter the South American country and added that he wanted to sell Venezuelan oil to US. refineries.

Over the weekend, President Donald Trump said the US. would “take control” of Venezuela after U.S. forces ousted Venezuelan President Nicolas Maduro, a step that could give U.S. energy companies access to the country’s vast oil reserves.

“Instead of the oil being blockaded as it is right now, we’re going to let the oil flow,” Chris Wright said, adding that the government would sell it to buyers in the U.S. and around the world.

The U.S. would sell the production coming out of Venezuela indefinitely, he said. The sales would be controlled by the U.S. government, Chris Wright added, with revenues collected from them “deposited into accounts controlled by the U.S. government.”

On Tuesday, Caracas and Washington reached a deal to export up to $2 billion worth of Venezuelan crude to the United States, under which Venezuela will be “turning over” between 30 and 50 million barrels of “sanctioned oil” to the U.S.

“If we control the flow of oil, the sales of that oil, and the flow of the cash that comes from those sales, we have large leverage. But without large leverage…you don’t get change.”

Chris Wright was speaking at the Goldman Sachs Energy, CleanTech & Utilities Conference in Miami.

Shares of U.S. refiners Marathon Petroleum , Phillips 66 and Valero Energy  were up between 2.5% and 5%.

Raising crude output from Venezuela is a top objective for Trump. Venezuela was producing as much as 3.5 million barrels per day (bpd) in the 1970s. But mismanagement and limited foreign investment led to a huge drop in annual production, which averaged about 1.1 million bpd last year.

“We could get several hundred thousand barrels a day of additional production in the short to medium term if the conditions are there for just small capital deployments,” Wright said.

The South American country sits atop the world’s largest oil reserves but accounts only for about 1% of global supply.

U.S. oil executives are expected to visit the White House later this week to discuss ways to revive Venezuela’s tattered oil sector, Reuters reported on Tuesday.

Chevron has been invited to the meeting, a source familiar with the matter said on Wednesday.