Venezuela's El Palito oil refinery
Venezuela's El Palito oil refinery AFP

A group of American entrepreneurs visited Venezuela earlier this week aiming at investing in oil after U.S. sanctions eased in October. The group met with the representatives of Petroleos de Venezuela SA (PDVSA), the state-owned oil firm, as well as local private companies. Among the investors was Harry Sargeant III, a Florida-based oil businessman and a key figure in facilitating collaborations between United States business interests and Venezuelan crude, according to a report by Forbes.

Conflicts in Ukraine and the Middle East as well as the migrant crisis have been said to be a cause of the renewed interest in Venezuela as a potential supplier of world energy. The easing of the sanctions, a decision made in exchange for commitments from the Maduro administration to take steps towards freer and fairer elections, have led oil traders and entrepreneurs to again set their eyes on Venezuela.

Who is Harry Sargeant III?

One of the interested entrepreneurs is Harry Sargeant III, a billionaire based in Florida. Sargeant is a diversified energy and shipping magnate. He used to be a Marine fighter pilot and is now the owner of a multi billion-dollar conglomerate of private global enterprises made up of aviation companies, oil refineries, trading operations, alternative fuels development and oil and asphalt shipping.

Sargeant has tried to make a deal with Venezuela before, in 2019, when he was looking to purchase a New Jersey asphalt plant that needed a steady supply of the heavy crude that Venezuela has.

"We like high-risk places," said Sergeant in an interview. However, his deal was derailed when the US imposed heavy sanctions on Venezuela.

Last week, Sargeant's Global Oil Management signed a deal to buy six 95,000-barrel shipments of asphalt from PDVSA.

What could oil investments mean for Venezuela?

PDVSA owes its partners and contractors about $15 billion dollars, which it could take years to pay off. New investment from interested foreign entrepreneurs could allow Venezuela to make more money through tax collection.

According to Francisco Monaldi, director of the Latin American Energy Program at Rice University's Baker Institute in Texas, Venezuela could earn about $16 billion from oil this year.

According to the central bank, the country's inflation reached 190% last year, while in 2022, the inflation rate was at 234%.

Maduro assured that the inflation will be two digits this year, adding that state oil company PDVSA contributed $6.23 billion to Vanezuela's coffers in 2023. He pointed out that this amount helped pay the salaries of several departments, including those in health care, education and housing.

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