Sounds impressive, but, as is almost always the case, his big win declarations seldom deliver the results he expects and promises.

So it is with Venezuelan crude oil. 

One of my first jobs as a shipbroker, this'll be back in 1975, was to manage a freight contract that delivered 40,000 ton lots each month of heavy fuel oil from Venezuela to the then UK CEGB (Central Electricity Generating Board - we loved unnecessarily complex names for our nationalised industries in those days). All seemed to be going well until they started using the stuff. The oil had a very high vanadium content, which leached during burning and coated the catalytic converters in the vast boilers, rendering them inoperative. An expensive 'cleansing' solution was found to overcome the problem but it put Venezuelan fueloil on the undesirable list so far as future supply contracts were concerned.   

Venezuelan crude oil is extremely thick, contains high levels of sulphur and also of various contaminating metals and other substances. Straight distillation produces predominantly heavy end fueloil products and only very limited amounts of high value middle and light end products. It takes additional, costly processes to maximise their extraction. Refineries exist in the USGulf that can process the crude, but it is an expensive exercise and one that needs to be supported by high prices of the finished products (gasoline, diesel and jet fueoil) in order to return a healthy profit. Refineries that aren't equipped to handle this complex crude cannot entertain processing it, and that represents the majority of US oil refineries. So getting through 65 billion barrels of the stuff is going to take some considerable - make that very considerable - time. The political history of Venezuela also won't have helped either, as facilities there that exist across the logistics process from extraction to quayside export, simply aren't in the best of shape.

The major oil companies (think Exxon, Mobil and Caltex for starters) that entertained extraction of Venezuelan crude in the past had their fingers burned in a variety of ways, from the nature of the crude through to the nationalisation of its oil fields and the decaying of facilities over the ensuing decades. It will be interesting to see who takes up the offer to get involved again, and what incentives will be necessary to make them do so.      

Of course, he's had time to realise all this, or at least find out what the downside is. His announcement that glosses over the issues therefore can mean one of two things. Either he hasn't bothered to find out, or he has, but is incapable of putting a negative slant on anything he does. Whether its ignorance or arrogance, it doesn't change the facts, and the oil companies that have to consider the value of taking on the task will be well aware of what the risks of doing so could have on the balance sheet.