US-Venezuela Oil Deal: 100-year rights to 17 areas, 35% stake for the Pentagon; what else is included?
The White House announced on Monday that the US is partnering with North American Blue Energy Partners. This announcement was made as part of US President Donald Trump’s efforts to gain access to Venezuela’s oil industry. Under this agreement, the Pentagon will secure a stake in approximately one-fifth of Venezuela’s vast oil reserves.
The Trump administration released further details regarding the agreement on Monday night. Trump had previously described it as the biggest oil deal in history. However, analysts have raised questions about the agreement, noting that it could take years to ramp up oil production in Venezuela again.
How did the US deal a blow to Russia and China?
Despite this, Trump and his associates are presenting the deal as an opportunity to develop a new oil superpower in the Western Hemisphere. Under the agreement, the US will form a private company as a joint venture with North American Blue Energy Partners. The White House had withheld this information from the public for several days.
North American Blue Energy Partners, owned by Venezuelan businessman Alejandro Betancourt, is already the second-largest oil operator in Venezuela after Chevron. According to the White House, Venezuela’s Acting President Delcy Rodríguez is granting the company rights to 17 oil fields for a period of 100 years. These fields hold certified oil reserves totaling 65 billion barrels. Several of these oil fields were previously held by Russian or Chinese companies.
What did the US gain from the agreement?
The White House stated on Monday that under this agreement, the Pentagon would receive a 35 percent stake in the company. Additionally, the State Department would be guaranteed the right to purchase 20 percent of the total production at cost price. Betancourt’s company has agreed to invest $100 billion in new oil-related infrastructure.
Trump has been pushing to boost oil production in Venezuela following the military operation in January, during which then-President Nicolás Maduro was charged with federal narco-terrorism and drug trafficking offenses. The White House claimed that the agreement would come at “zero cost” to the United States. Additionally, the government would hold veto power over members of the company’s board of directors, the majority of whom would be U.S. citizens.
What are the risks associated with the oil deal with Venezuela?
In a fact sheet regarding the agreement, the White House stated, “North American Blue Energy Partners will engage reputable U.S. auditors, lawyers, and consultants. The agreement between the U.S. government and North American Blue Energy Partners will be governed by U.S. law and subject to the jurisdiction of U.S. courts.”
