Chevron, Eni commit billions to Venezuela as election date stays open
A United Nations fact-finding mission reported Sept. 16 that Venezuela’s state institutions responsible for repression remain intact even as the harshest abuses have declined. The mission’s chair, Peruvian human rights expert Sofía Macher, said the change “does not yet amount in any way to a transformation of the system.”
The assessment appears in “Venezuela’s oil is flowing faster than its democracy,” a United Press International “Perspectives” opinion column by Jorge Rosales, a Chilean law student, published Oct. 2. The column’s interpretive arguments are Rosales’s analysis; the views expressed are solely those of the author.
Rosales writes that when U.S. forces captured Maduro in Caracas on Jan. 3 and flew him to the United States to face federal drug-trafficking charges, many Venezuelans hoped the country had turned a page. Nearly nine months later, he argues, the page has turned faster for investors than for citizens. Venezuela, in his account, faces two transitions at once: an economic transition reconnecting the country to international markets and rebuilding an oil industry hollowed out by mismanagement and sanctions, which he says is moving quickly, and an institutional transition of reforming the security agencies, restoring judicial independence and holding credible elections, which he says has barely begun. He argues that Venezuela “has changed the person at the top while leaving much of the ruling structure in place,” and that it is that structure, not a newly elected government, that is now signing contracts worth billions of dollars.
On Sept. 2, with U.S. Energy Secretary Chris Wright in Caracas, Chevron announced that its Venezuelan joint ventures would invest more than $7 billion over five years and double production to about 600,000 barrels a day. Italian energy company Eni and state-owned PDVSA agreed to invest about $1.5 billion a year in the Junín 5 heavy-oil project, an agreement that could help Eni gradually recover roughly $2.3 billion in outstanding receivables from PDVSA. ExxonMobil, the column reports, is advancing negotiations to return to the Orinoco Belt after nearly two decades away.
Interim President Delcy Rodríguez has released political prisoners and closed El Helicoide, the Caracas detention center long synonymous with repression. Rodríguez served as Maduro’s vice president and, the column notes, was among the most powerful figures in the government the UN describes.
Under an arrangement the White House detailed in an Aug. 31 fact sheet, Venezuela’s interim authorities granted North American Blue Energy Partners 100-year concessions over 17 oil fields holding an estimated 65 billion barrels of proven reserves, with the U.S. government to receive a 35% equity stake together with extensive governance and oil-purchasing rights. Rosales argues that a century is longer than Venezuela has been a functioning democracy in its entire history, and that commitments of that length, made with an unelected and unreformed government, would be difficult for a future democratic one to revisit. He writes that Venezuela is about to absorb billions of dollars through a state whose courts, security services and oil company remain largely unreformed, and that when the same officials who controlled the old system decide who receives contracts and permits, new money can entrench them rather than weaken them.
Rosales invokes the Latin American political concept of the caudillo — the indispensable leader who claims he can deliver what ordinary politics cannot — and cites the late Harvard political scientist Samuel Huntington, who in “Political Order in Changing Societies” argued that rapid economic change tends to breed corruption when political institutions are too weak to channel it. Rosales applies both ideas to the present moment: a state with unreformed institutions absorbing billions in new investment, with officials of the prior government still in place to direct the contracts.
At the same Sept. 2 ceremony where the oil agreements were signed, Rodríguez said a presidential vote would come when Venezuela is “prepared” and declined to set a date. U.S. Secretary of State Marco Rubio has argued that a vote held now would run on the existing electoral machinery and that the National Electoral Council needs renewal first. Opposition leader María Corina Machado has insisted that democracy requires a concrete electoral calendar. Rosales writes that without one, “not yet” can quietly become “not ever,” while contracts signed in the meantime run for decades.
The U.N. mission has urged the United States and other influential actors to press for bigger institutional change, linking further sanctions relief and new economic concessions to verifiable benchmarks that include disarming the armed pro-government groups known as colectivos, restructuring the intelligence services, freeing remaining political prisoners and establishing a credible electoral calendar under a renewed electoral authority.
Rosales writes that there are grounds for cautious hope, noting that a year ago few Venezuelans would have predicted El Helicoide’s closure or that ExxonMobil would be negotiating a return. He quotes Macher’s warning that “an opening that leaves repressive structures standing remains fragile and reversible.” Maduro’s capture, he concludes, changed Venezuela in a single night; whether it ended one era or opened a genuinely different one depends on whether the country’s institutions become stronger than the people who control them before the oil money makes those people stronger still.
Rosales is a Chilean law student, writer and author of two books. He is a graduate of the Legacy of the Americas Academy of Advanced Studies, a regional leadership program focused on the humanistic foundations of Western civilization, democracy, and global affairs.