President Trump points to Continental Resources CEO Harold Hamm as he arrives to speak on energy dominance and deregulation at the 9th annual Shale Insight Conference in Pittsburgh on Oct. 23, 2019.Evan Vucci/AP
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“It’s a milestone deal in making the Western Hemisphere the center of the global energy system,” Energy Secretary Chris Wright said on Wednesday.
He was talking about a fellow Trump ally’s oil deal with Venezuela: oil tycoon Harold Hamm of Continental Resources, a US petroleum and natural gas production company, who announced a preliminary deal with PDVSA, Venezuela’s national oil company, that same day. The agreement, which allows Continental Resources to develop and operate 126,000 acres of oil fields—an estimated 30 billion barrels of oil—was presented by Hamm, with Wright beside him, at this week’s G20 energy summit in Houston.
Hamm is in Trump’s inner circle and has advised the president on energy issues to benefit his business ventures, including fracking, and personally contributed $4.3 million to Trump-aligned PACs for his 2024 election campaign.
The deal comes after Chevron became the first known major US oil company earlier this month to expand production in Venezuela since the Trump administration seized President Nicolás Maduro in January, investing $7 billion over five years to more than double its production to 600,000 barrels a day.
On Wednesday, The Wall Street Journal reported that ExxonMobil is close to signing its own deal with Venezuela, which could be completed as early as the end of this month and include more than 50 billion barrels in oil reserves (Venezuela says it has about 300 billion barrels in total reserves). The potential Exxon deal is notable as the company has repeatedly tried to win more money in restitution after former Venezuela President Hugo Chávez nationalized major foreign oil operations in 2007, forcing Exxon to abandon its Venezuela projects.
While some oil executives remain hesitant to invest in Venezuelan oil due to the uncertainty surrounding the Trump administration’s August deal with the country, the challenges of scaling up production, and the chaotic relationship between the US and Venezuela, it’s become more clear that it has opened the door for his friends and other wealthy companies to invest in the country’s massive oil reserves.
Since the Trump administration captured Maduro, acting President Delcy Rodríguez has overhauled regulations on oil to encourage outside investment, including lowering tax rates on production. Continental Resources cited these changes as a major reason to pursue its oil deal.
As Jeff Colgan, a political science professor at Brown University, told me earlier this month, the winners of Trump’s oil agreement won’t lower gas prices for American consumers or help everyday Venezuela residents—it will just “line the pockets of some American companies.”
