At 7 a.m., the earth began to rumble. Suddenly, oil blew out of its well in a massive eruption that towered 200 feet in the air and sprayed the fearful villagers of La Rosa.
The most productive oil well on the planet had just been discovered. With it, Venezuela’s transformation to a petroleum supergiant had begun — for better or worse.
Venezuela had been known to possess some crude — 15th-century Spanish explorers noticed indigenous people using oil for fires and asphalt to patch their canoes. But Venezuela’s wealth of oil had been in dispute until foreign petroleum companies grew serious about the region during World War I, when fuel was in high demand and Western nations began to fear supply shortages.
Surveyors from Venezuelan Oil Concessions (VOC), the local Royal Dutch Shell affiliate, spent much of the 1910s exploring the region with only moderate success. But on July 31, 1922, they made a decision of significant consequence: VOC decided to drill deeper into Los Barrosos-2, an oil well in the Maracaibo Basin they had drilled four years prior but had since abandoned, according to American Association of Petroleum Geologists’ Orlando Méndez, a Venezuelan oil field historian.
VOC would continue to drill Los Barrosos-2 for months. By the second week of December, the driller reached a depth of 1,450 feet and struck oil sands. Oil and gas began to flow, and on December 14, the ground shook, the gusher came pouring out of the ground, and the geyser couldn’t be stopped for more than a week.
It was a major ecological disaster. But it set Venezuela on a century-long course of stunning wealth, significant crashes, and political turmoil. That path ultimately led to the extraordinary capture of President Nicolás Maduro by US forces on Saturday, a stunning operation that could ultimately restore America’s oil dominance in the country.
An uncertain future
President Donald Trump said a core objective of the recent military operation in Venezuela was to place the country’s oil sector under US control, and give US oil companies the ability to rebuild there
“The oil companies are going to go in and rebuild their system,” Trump said Sunday night. “It was the greatest theft in the history of America. Nobody has ever stolen our property like they have. They took our oil away from us. They took the infrastructure away and all that infrastructure is rotted and decayed, and the oil companies are going to go in and rebuild it.”
If that happens, it will be expensive, complex and potentially dangerous.
“It will be a long road back for the country, given its decades-long decline under the Chávez and Maduro regimes, as well as the fact that the US regime-change track record is not one of unambiguous success,” said Helmia Croft, head of global commodity strategy at RBC Capital Markets.
Croft said accomplishing Trump’s goal will effectively require US oil companies to play a “quasi-governmental role” to build out capacity and develop the infrastructure. That could cost $10 billion a year, oil executives contend, according to Croft.
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