TCL #55: Black Gold Rules All
Good morning. This is the first newsletter of 2026, in which we look back at last week's key occurrences in the chemical and allied industries.
Oil & Gas
On January 3, 2026, the US conducted a military strike on Venezuela following months of planning and a series of maritime strikes. The Venezuelan president, Nicolás Maduro, was captured and flown out to US. The US linked the intervention partly to Venezuela's oil, promising US control to revive its industry. The legal basis for US intervention and governance is unclear to me.
President Trump, in a public address post the invasion:
"We're going to rebuild the oil infrastructure, which will cost billions of dollars, it will be paid for by the oil companies directly. And we're going to get the oil flowing the way it should be"
Currently, Chevron is the only US company operating in joint ventures with the Venezuelan state oil company PDVSA (Petróleos de Venezuela S.A.) and the country's largest foreign investor. In the past, oil companies like ConocoPhillips and Exxon Mobil suffered asset nationalization in Venezuela, leading to significant financial losses and legal disputes.
Venezuela claims to possess the world's largest proven oil reserves, exceeding 300 billion barrels. This figure represents ~17% of global oil reserves, surpassing Saudi Arabia and Canada. However, the country's daily output is currently around 900,000 barrels, a substantial decrease from 3 million barrels per day in 2013.
As of today, the global oil market has low demand and rising supplies, with US oil prices below $60 a barrel. This is not an encouraging figure for most major oil producers to flock to the country.
Energy
Ørsted, the Danish multinational company, is seeking a court injunction against the US government over its decision to suspend the lease for the company's Revolution Wind joint venture project. This offshore wind project is designed to power over 350,000 homes in Connecticut and Rhode Island. The project is almost 87% complete with most turbines installed. The current administration stated the suspension prioritizes 'America First' and national security of the American people.
Specialty Chemicals
Berkshire Hathaway has completed its acquisition of OxyChem from Occidental Petroleum for $9.7 billion in cash. This deal was announced on October 2025, and finalized on January 2, 2026. OxyChem is a producer of polyvinyl chloride and chlor-alkali among other products, with operations in US, Canada, and Latin America. OxyChem generated $1.12 billion in 2024 and received 47 awards from the American Chemistry Council for excellence in environmental and safety performance.
Have a great week.