I’m working with Venezuela to kill its inflation. Trump’s secret oil deal with Delcy Rodriguez is illegitimate — and unhelpful

A U.S.-Venezuela oil deal has been announced by President Trump and Interim President Delcy Rodríguez.

The public knows virtually nothing about the details of the agreement — nor do I, a Special Adviser to Venezuelan Congressman Antonio Ecarri on Economic, Monetary, and Energy Affairs.

This deal was clearly arrived at in secrecy, with no public debate, and signed under duress.

Therefore, it is illegitimate and probably illegal.

This deal took not only me, but everyone I am in touch with in Caracas by surprise.

That being said, it is vital to understand the importance of establishing clear private property rights in Venezuela’s vast oil reserves.

The establishment of such private rights would give Venezuela’s oil reserves a positive present value.

It’s important to understand why that’s not the case now.

PDVSA is a state-owned oil company that dominates Venezuela’s economy and accounts for almost 95% of Venezuela’s foreign exchange earnings.

Even by state-owned enterprise standards, PDVSA is grossly mismanaged, as evidenced by its production and reserve figures.

Under the direction of Luis Giusti in the 1994-1998 period, PDVSA’s production soared.

This trend changed in 1999, when Hugo Chavez became Venezuela’s president and introduced Chavismo as the country’s guiding economic doctrine.

Venezuela’s oil output began to stagnate, a situation which worsened further after the coup attempt of April 2002.

Chavez responded by purging PDVSA of its professionals en masse, replacing them with “reliable” hands who were loyal to Chavez’s socialist regime.