Planet Money: Chevron, Venezuela, and the Paradox of Plenty

Date: January 17, 2026
Podcast: Planet Money (NPR)
Hosts: Kenny Malone, Erika Barras
Guests/Experts: Terry Karl (Stanford political economist), Miguel Tinker Salas (Venezuelan historian)

Episode Overview

This episode unpacks the long, intricate relationship between Chevron and Venezuela and explores how the country became the world’s first “petrostate.” Through interviews with economists, historians, and people who lived through key moments, the show examines Venezuela’s journey from coffee exporter to oil-rich boomtown to its present struggle—and why Chevron, of all companies, has uniquely maintained a presence in Venezuela through economic booms, busts, corruption, and political upheaval. Central to the discussion are the economic concepts of the “resource curse” and the “paradox of plenty.”

Key Discussion Points & Insights

1. The Unique Spotlight on Chevron

• Chevron’s exceptional endurance in Venezuela is highlighted during a dramatic White House meeting on the country’s future (00:00–02:00).
• Notable quote: “You were the only one that was there for all that.”—President Trump, recollecting Chevron’s persistence (01:00).

2. Venezuela: From Coffee to Oil, Birth of the Petrostate

• Venezuela’s original agrarian economy (primarily coffee exports) is rapidly eclipsed by a 1922 oil discovery at Lake Maracaibo (05:04–07:08).

  • “Lake Maracaibo gusher” and oil raining 200 feet in the air set off the oil rush.
  • Venezuela quickly becomes the world’s top oil exporter by the late 1920s.

• Introduction of the term “petrostate” by Terry Karl to define countries built around oil (08:17–08:45).

  • Quote: “Oil states are different from all other states, period.” —Terry Karl (08:31)

3. Economic Consequences: Dutch Disease and the Resource Curse

• The “Dutch disease”: Oil wealth causes Venezuela's currency (the bolivar) to skyrocket, destroying the coffee market and wiping out the prior economy overnight (09:06–10:25).
  • Quote: “They lose their entire coffee market...They lose it entirely.” —Terry Karl (10:21–10:29)
• The “resource curse” (or “paradox of plenty”): A single commodity brings riches but results in instability, corruption, authoritarianism, and monoeconomic vulnerability (11:11–11:23).

4. Rise of Oil Nationalism and OPEC

• 1940s–1970s: Venezuela gradually reclaims more control over oil, starting with a 50/50 profit split (“5050 agreement”) with foreign companies during WWII (12:36–13:40).

  • Quote: “We want 50% of everything you take.” —Juan Pablo Perez Alfonso (12:56)

• Postwar: Venezuela’s Oil Minister Juan Pablo Perez Alfonso spearheads global oil cartelization—leading to the birth of OPEC.

  • Venezuela bands with Iran, Iraq, Saudi Arabia, and Kuwait to set oil prices and production quotas (16:05–16:36).
  • OPEC marks the shift from multinational oil company control to state-driven oil policy.

5. Boom Times and Growing Inequality

• 1950s–1970s: Oil wealth transforms Caracas into a metropolis with “freeways, high rise structures, Concorde flights,” but extreme inequality persists (18:16–19:39).
  • “La Venezuela Saudi” (“Saudi Venezuela”): Petrodollars flow, a growing middle class emerges, luxury and ostentation are visible everywhere (19:43–20:24).
  • Memorable moment: Oil-funded extravagance includes pouring bottles of scotch over books at inaugurations.
  • Quote: “Oil funds are just pouring into the country. There’s so much money around that you can’t even believe it.” —Terry Karl (19:59)

6. Downside of Oil Wealth: Corruption and Collapse

• Despite riches, Terry Karl and others highlight rampant corruption and inefficiency—a classic resource curse symptom.

  • “They were using it as sort of the goose that laid the golden eggs, but they were slowly killing the goose.” —Terry Karl (21:57)
  • Mismanaged infrastructure projects and widespread kickbacks characterized the system (22:03–24:12).

• Growing complacency: Everyone—companies and individuals—plays the system to skim from oil revenues, eroding broader economic foundations (24:00–24:16).

  • Quote: “That’s why I knew it was gonna come apart, because this game doesn’t last.” —Terry Karl (24:16)

7. From Boom to Bust: Political Upheaval

• 1980s: A collapse in oil prices crashes the economy, leading to mass protests (El Caracaso, 1989), poverty, and political uncertainty (25:11–26:41).

  • “You had the rise of new political forces...that claimed they would solve Venezuela’s long-term problems.” —Miguel Tinker Salas (26:41)

• 1990s: The government courts foreign oil companies back; widespread public discontent persists despite “la Apetura” (“the Opening”) (26:49–27:01).

8. Chavez and the New Era: Chevron's Calculated Loyalty

• Hugo Chavez comes to power (1999), seizes direct control of oil, eventually forces almost all American oil companies out—except Chevron (27:25–28:16).

  • Quote: “Chevron stuck it out. Chevron agreed.” —Miguel Tinker Salas (28:16)

• Chevron’s rationale: long-term vision and willingness to accept strict terms. In turn, Chevron remains when the rest flee (28:20–28:34).

  • “With the exit of the other companies, Chevron shines.” —Miguel Tinker Salas (28:34)

9. Surviving Sanctions, Staying for Opportunity

• Under sanctions, collapsing economy, and hyperinflation, Chevron negotiates delicate deals to keep operations running, leveraging its role as both economic and geopolitical asset (28:56–29:50).
  • “If we leave, the Chinese step in...Chevron’s presence had both a geopolitical interest as well as an economic interest.” —Miguel Tinker Salas (29:21)
• Chevron now employs ~3,000 Venezuelans and produces 25% of the country's oil—all of it exported to the U.S. (30:00–30:15).

10. Bleak Outlook for Others, Windfall for Chevron

• Venezuela’s oil infrastructure is decrepit and stripped, skilled labor is depleted (~8 million Venezuelans have emigrated since 2014), and the cost to revive the industry is estimated at over $100 billion (31:22–32:02).
  • “It’s incredible. What was left of the industry has been stripped down...the wires have been taken out...the windows have been taken out.” —Miguel Tinker Salas (31:22)
• Other U.S. companies (Exxon, Conoco) remain uninterested due to legal and commercial risks; only Chevron is ready to benefit if the U.S. presses ahead (30:44–32:31).

11. Final Reflection: It's Not the Oil, It’s the Politics

• Terry Karl rejects the notion of a simple “resource curse,” reframing it as a “political resource curse” (32:52–33:16).
  • Quote: “A resource doesn’t have a curse. It’s just black, viscous stuff...It’s how you use it. And that is about human beings.” —Terry Karl (32:59)

Memorable Quotes & Moments with Timestamps

• “Where’s Chevron?” —President Trump (01:50)
• “Petrostate...oil states are different from all other states, period.” —Terry Karl (08:31)
• “They lose their entire coffee market...They lose it entirely.” —Terry Karl (10:21–10:29)
• “Oil was everywhere. You could not escape it.” —Miguel Tinker Salas (14:13)
• “To baptize the book they poured an entire bottle of scotch.” —Terry Karl (20:08)
• “Es el excremento del diablo. It’s the devil’s excrement.” —Juan Pablo Perez Alfonso, relayed by Terry Karl (21:31)
• “With the exit of the other companies, Chevron shines.” —Miguel Tinker Salas (28:34)
• “If we leave, the Chinese step in ... you had an American footprint.” —Miguel Tinker Salas (29:21)
• “It’s not the oil, it’s how you use it. That is about human beings.” —Terry Karl (32:59)

Timestamps for Key Segments

• 00:00–02:18 – White House meeting; Chevron’s unique standing
• 05:04–07:08 – Discovery of oil at Lake Maracaibo
• 08:17–10:25 – Introduction and effects of the “petrostate” and Dutch disease
• 12:36–13:40 – The 50/50 agreement and oil nationalism
• 16:05–16:36 – Formation of OPEC
• 19:43–20:24 – “Saudi Venezuela” wealth culture
• 21:31 – “Devil’s excrement” as a metaphor for oil’s double-edged effect
• 24:16 – Why Venezuela’s economic model was unsustainable
• 25:11–26:41 – El Caracaso protests and the shift in Venezuelan politics
• 27:25–28:34 – Chavez nationalizes oil, Chevron alone stays
• 29:21 – Geopolitical rationale for Chevron’s continued presence
• 31:22 – Degraded state of oil infrastructure and loss of expertise
• 32:59–33:16 – Reframing the “resource curse” as a political issue

Tone & Style

The episode balances a conversational, sometimes wry narrative with clear, accessible economic analysis. The use of personal anecdotes, vivid historical detail, and signature sound effects (“You want sound effects?”) keeps the tone lively and relatable. Guest experts’ voices add scholarly weight but are always grounded in real-world implications.

Conclusion

The story of Chevron and Venezuela offers a sweeping lesson on how oil wealth can alternately build and devastate a nation—depending not on the resource itself but on the political and social structures surrounding it. With Venezuela’s oil industry in ruins and only Chevron standing to gain from renewed U.S. interest, the episode closes by questioning whether the cycle of plenty and poverty is destined to repeat—or might finally change—if the human choices guiding the resource do.

For listeners seeking to understand Venezuela’s decline, the resilience of Chevron, and the eerie echoes of history in global oil politics, this episode provides a master class—at once cautionary and compelling.