If Guaidó comes to power and privatizes PDVSA, U.S. oil companies — with Chevron and Halliburton leading the pack — stand to make record profits in the world’s most oil-rich nation, as they did in Iraq following the privatization of its national oil industry after U.S. intervention.
by Whitney Webb
Part 5 - Investing in a gung-ho president
Chevron’s hopes for a continued U.S. government policy that favors its growth domestically and globally have continued under the Trump administration and have been visible for some time, as evidenced by its $500,000 donation to Trump’s inaugural committee and their top executive’s praise for the “pro-business environment” cultivated by the Trump administration. Indeed, in March 2017, then-Chevron CEO John Watson told CNBC that he had already met with White House staff on “multiple occasions” in just the first three months of the administration and had been “encouraged by those meetings.” “We’ve seen a more pro-business environment … I think the approach they’re taking toward business — toward enabling our economy to grow again — is a real positive,” Watson added.
Halliburton too has long had high hopes for Trump given that the president held between $50,000 and $100,000 in company stock up until December 2016, when he sold his personal stocks to avoid “conflicts of interest” during his presidency. However, some of Trump’s earliest policy proposals were described by the media as directly benefiting Halliburton, including his administration’s push to open more publicly-held lands in the U.S. to oil drilling.
Furthermore, the recent scandal that forced Trump’s secretary of the interior, Ryan Zinke, to resign involved Zinke’s alleged corrupt dealings with Halliburton chairman David Lesar, suggesting that the Trump administration’s potential for a conflict of interest with Halliburton did not magically dissipate following Trump’s sale of his personal investments.
Since the early days of the administration, both Halliburton and Chevron have benefited directly from several Trump administration policies, both foreign and domestic. For instance, Chevron and Halliburton benefited substantially from the Trump administration’s tax cuts, which were recently found to have had “no major impact” on economic growth or company hiring practices but instead enabled mega-corporations to buy back stocks en masse in order to increase their companies’ stock prices. After the passage of those tax cuts, Chevron executives urged governments around the world to implement similar legislation.
In addition, consider Trump’s 2017 decision to withdraw from the Extractive Industries Transparency Initiative (EITI), which Reuters explained as “a global standard for governments to disclose their revenues from oil, gas, and mining assets, and for companies to report payments made to obtain access to publicly owned resources, as well as other donations.” Bloomberg noted at the time that the Trump administration’s decision to withdraw had followed “a long lobbying battle waged by the American Petroleum Institute, Exxon Mobil Corp. and Chevron Corp.”
The involvement of top U.S. oil corporations like Chevron in the administration’s decision to withdraw from the EITI led Corinna Gilfillan, head of the U.S. Office at NGO Global Witness, to state that it was “Exxon and Chevron’s preference for secrecy that [had] made it impossible for the U.S. to comply.” Gilfillan then told Common Dreams: “When major Russian and Chinese oil companies are disclosing more information about their deals around the world than their U.S. counterparts, you have got to ask: what are Exxon and Chevron so desperate to hide?”
However, Chevron, for its part, has not agreed with every Trump policy, as the company did lob considerable criticism at the Trump administration last June over his imposition of steel tariffs during the first phase of the ongoing “trade war” with China. Yet, that criticism disappeared a few months later, when another Trump policy – his draconian sanctions targeting Iran’s oil sector – took effect. As the Washington Examiner noted this past November, Trump’s sanction policy targeting Iranian oil “has proved a lucrative one for the shareholders who own oil companies such as ExxonMobil and Chevron,” resulting in a jump for those companies’ third-quarter earnings “that topped Wall Street expectations by wide margins.”
The Examiner went onto note that Trump’s sanctions on Iranian oil exports led Chevron’s net income to more than double to $4.1 billion, with cash from operations reaching “the highest it has been in nearly five years.”
However, Halliburton’s reaction to Trump’s Iran policy is more mixed, given its considerable business interests in Iran and the fact that it had benefited from the Iran nuclear deal approved by the previous administration of Barack Obama. Yet, if the Trump administration’s regime-change policy targeting Iran succeeds, Halliburton will be among the top beneficiaries of that policy as well, given its already established presence in the country.
Now, with Venezuela’s massive oil resources in the Trump administration’s crosshairs, Chevron stands to gain once again from Trump’s foreign policy, which has been guided by oil politics in several instances.