White House, Caracas release details on historic US

On August 28, US President Donald Trump announced that US officials had secured “majority U.S. control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela,” in what he described as “THE BIGGEST OIL DEAL IN WORLD HISTORY!” Three days later, the White House published a fact sheet on the deal that outlines a 25-year plan to forge “new robust, strategic and defensible supply chains in our hemisphere.” Under the agreement, Venezuela granted North American Blue Energy Partners (NABEP), a privately held oil company controlled by Venezuelan businessman Alejandro Betancourt, 100-year concessions to operate 17 fields. NABEP, headquartered in Barbados with offices in Venezuela, will retain operating control and seek to finance as much as $100 billion in investment to rehabilitate and expand Venezuela’s production. Washington will not directly own Venezuela’s underground oil. However, the Department of War’s Office of Strategic Capital will receive rights to a 35 percent stake in NABEP’s “corporate parent.” The US government will have veto authority over NABEP board appointments, and a majority of its directors must be American citizens. The US State Department will also have the right to purchase 20 percent of production from the fields at production cost and receive the first opportunity to purchase the remaining output. The precise corporate entity in which the Department of War will hold its stake remains unclear. The White House described it as NABEP’s “corporate parent,” while NABEP said Washington would receive rights to a 35 percent stake “in the company.” AP reporting has described the transaction as creating a new private corporate vehicle. Venezuelan interim President Delcy Rodriguez has portrayed the agreement differently. She emphasized that Venezuela retains “ownership and sovereignty” over its petroleum and described the bilateral arrangement as lasting 25 years, rather than the 100-year concession period disclosed by Washington. Rodriguez said the first phase could generate approximately $209 billion for Venezuela and that roughly $19 from every barrel produced would flow to the Venezuelan government. She has also said the 17 fields could eventually produce more than 1.5 million barrels per day. The agreement represents another step in a dramatic reversal of the two countries’ oil relationship following the January 3 US operation that captured former Venezuelan President Nicolas Maduro. Trump said immediately afterward that Washington intended to oversee Venezuela’s recovery and “rebuild the oil infrastructure.” Venezuela was once among the world’s largest oil producers and one of the United States’ most important foreign suppliers. Its production exceeded three million barrels per day during the 1990s and reached approximately 3.2 million barrels per day around 2000. However, output subsequently declined as state-owned Petroleos de Venezuela (PDVSA) suffered from underinvestment, loss of technical expertise, political interference, and eventual US sanctions. The United States imported approximately 1.4 million barrels per day of Venezuelan crude at the relationship’s late-1990s peak. Even shortly before Washington sanctioned PDVSA in January 2019, the trade remained considerable: US crude imports from Venezuela averaged approximately 741,000 barrels per day in 2016, 618,000 in 2017, and 505,000 in 2018. The relationship was particularly important because much of Venezuela’s crude is heavy or extra-heavy, and Gulf Coast refineries invested billions of dollars in equipment capable of processing this type of oil. As Venezuelan supplies disappeared, US refiners increasingly relied on other heavy-crude suppliers, particularly Canada. Venezuela’s geological potential is significantly larger than the 65 billion barrels included in the new concessions. The Organization of the Petroleum Exporting Countries (OPEC) reported approximately 304 billion barrels of proven Venezuelan crude reserves at the end of 2025, the largest reported national total in the world. The US Geological Survey has estimated that the Orinoco Oil Belt alone contains more than one trillion barrels of heavy oil in place, approximately 513 billion barrels of which could be technically recoverable. Those reserves have not translated into comparable production. Venezuelan output fell to roughly 640,000 barrels per day in 2021 before recovering to around 1.1 million barrels per day in 2025. US Energy Secretary Chris Wright said on September 2 that agreements with foreign oil companies could more than double current production “in the next few years.” American oil companies have responded unevenly to the agreement. Chevron has made the largest commitment, announcing on September 2 that its Venezuelan ventures intend to invest more than $7 billion over the next five years and increase production to approximately 600,000 barrels per day. Chevron CEO Mike Wirth said the company expects production costs of less than $20 per barrel from its expanded Venezuelan operations. ExxonMobil has been considerably more cautious. CEO Darren Woods told Trump during a January White House meeting that Venezuela was currently “uninvestable,” citing the need for stronger legal and commercial protections. Exxon subsequently sent representatives to assess possible projects but has not announced an investment comparable to Chevron’s. ConocoPhillips, whose Venezuelan assets were nationalized under Hugo Chavez, has similarly stressed the importance of the rule of law and contractual stability. The NABEP agreement has also caused concern among some producers. Reuters reported that oil executives and advisers have questioned whether companies will be competing on equal terms against an operator backed by a US government shareholder, century-long concessions, and guaranteed government-purchasing rights. The arrangement is unlikely to produce a dramatic immediate decline in US gasoline prices. New Venezuelan production requires wells, pipelines, storage, power generation, upgraders, ports, and other infrastructure that has deteriorated during years of underinvestment, corruption, and mismanagement. However, a sustained increase in barrels per day would add supply to the global market and could place downward pressure on crude prices. Its potential importance has increased during the ongoing US conflict involving Iran, which has disrupted Middle Eastern petroleum supplies. The International Energy Agency estimated in August that global oil production will fall by approximately 4.3 million barrels per day on average in 2026. Expanding a large source of crude in the Western Hemisphere would give US refiners additional supplies that do not transit vulnerable Middle Eastern maritime chokepoints. The deal could also reshape Venezuela’s relationship with OPEC. Venezuela was one of OPEC’s five founding members in 1960, but Venezuelan officials are reportedly considering withdrawing from the cartel and have discussed the possibility with US officials. No decision has been announced. Asked about the reports on August 31, Trump said, “It’s up to them.” For Washington, the agreement links the US government directly to one of the world’s largest petroleum resources, provides preferential access to future Venezuelan production, and accelerates the reorientation of an oil industry that, under Maduro, had become increasingly dependent on China, Russia, and Iran.