US Interior Secretary Doug Burgum was still flying back from Venezuela when the Trump administration made it official: The US would re-establish diplomatic relations with the South American country, seven years after suspending operations at its embassy in Caracas.
The formal step marked the culmination of Burgum’s two-day mission in Venezuela to drive policy reforms and investment meant to unlock the country’s oil and mining riches — with the promise of simultaneously nurturing greater political stability and improving living conditions.
It’s a kind of dollar diplomacy — with President Donald Trump using the lure of foreign investments to nudge along democratic reforms, just two months after the US captured former President Nicolas Maduro.
Critics say Washington is attempting to vassalize Venezuela, taking control of its crude, coal and critical minerals for its own gain. But Burgum and other Trump officials see a chance to foster friendly supply chains for oil and minerals that can’t be easily choked off, while making Venezuela more stable to the benefit of both residents and neighboring nations.
“Venezuela’s leadership is leaning in hard toward building a positive, strong, enduring relationship with the United States,” Burgum said. “They’re creating a framework that is going to mean more peace, more stability, more prosperity for the people of Venezuela.”
Burgum left Caracas after securing a promise from interim President Delcy Rodriguez that the country would advance mining law reforms seen as essential to luring foreign investment. He also presided over the signing of agreements helping Shell Plc restart oil and gas development with Venezuelan and American contractors.
In the background, other deals were being honed, including a plan for Venezuela’s state mining company to sell as much as 1,000 kilograms of gold to commodities trader Trafigura Group — and then onto refineries in the US.
When Rodriguez announced one of those milestones — the planned mining law overhaul — it was to a phalanx of foreign and local journalists inside the Palacio de Miraflores, marking the first time independent local press had been allowed inside the palace for at least 15 years.
The developments fed a sense of ebullience among the dozens of oil executives, mining leaders and financiers that huddled with Burgum to sketch out opportunities and tick through potential obstacles to investment.
Enormous Challenges
But while they gushed about the opportunities, some also expressed fear they wouldn’t last. The upside and potential is so great, it’s hard not to get excited, said one, before soberly adding: We could all end up in the same place again in a few years.
The challenges are enormous. Armed militias and guerrilla groups now control deposits of gold and the critical material coltan in Venezuela, where they are accused of human rights abuses and driving irreversible environmental damage. That stands as a major obstacle to mining companies that will be putting not just capital but human lives at risk in the region.
Burgum said mining executives asked Venezuelan officials about the risk, prompting an interior security official to read off crime statistics and promise that anyone coming to assess sites in the areas would be safe and secure. Rodriguez offered similar assurances, he said.
“They’re basically opening up the doors for travel for due diligence to these mining areas, and the highest levels of government are personally guaranteeing the security for people,” Burgum said. “They want people to create jobs. They want to get back to legitimate versus criminal organizations controlling their natural resources.”
Under the Trump administration’s theory of change — echoed by some of the potential investors — the entry of Western companies abiding by higher standards can help crowd in better practices and crowd out some of the bad actors and illegal mining.
“That activity filled an empty vacuum. It went in and it created an economic opportunity where there was none,” Burgum said. “But I think that if you have a superior economic opportunity” then “you’re going to see this government very concerned about providing the right kind of security.”
The US government has already begun unwinding sanctions that barred American firms from operating in Venezuela, beginning with general licenses targeting oil sales and crude production. Companies that still had trouble moving equipment and resources into the country under those broader authorizations have already been granted sanctions waivers to do so, Burgum said.
And there’s more to come, he said. The US government is already working on a similar set of general licenses that would cover “people that want to invest in mines, people that want to ship mining equipment, people that want new technology to come here,” Burgum said. “We want to open the door for those to come back in.”
(By Jennifer A. Dlouhy)
