Collin Binkley, Associated Press Juan Pablo Arraez, Associated Press
WASHINGTON (AP) — President Donald Trump announced a deal on Friday that he described as "THE BIGGEST OIL DEAL IN WORLD HISTORY" which would provide the United States access to Venezuela's oil reserves. The White House has not provided extensive details about the agreement, which follows the capture of former President Nicolás Maduro by American forces in January.
Venezuela's acting president, Delcy Rodríguez, stated that the deal aims to modernize the country's oil industry and contribute to economic recovery. However, specifics regarding the timeline for drilling and funding for the project remain unclear, as no formal text of the agreement has been released.
A new company formed by the U.S. government and an unnamed private operator in Venezuela has been granted rights to untapped oil fields for a duration of 100 years. Rodríguez indicated that the deal includes the development of 17 oil fields with an estimated potential of 65 billion barrels, potentially attracting $100 billion in investments and generating over $209 billion in taxes for Venezuela.
The agreement reportedly allows the U.S. to obtain 55% of the effective output from the new company, which includes ownership stakes and rights to purchase oil at cost. According to an unnamed U.S. official, oil purchased by the U.S. will contribute to the strategic oil reserves and military needs.
Trump suggested that the deal could help lower gas prices for Americans, a significant concern as rising oil prices are influenced by geopolitical tensions, including the situation in Iran. However, experts caution that Venezuela’s deteriorating oil infrastructure requires substantial investment and time to restore production levels.
Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, noted that while the deal may be beneficial in the long term, it is unlikely to impact gas prices in the immediate future. The average price of gas in the U.S. was approximately $4.08 per gallon, compared to $3.20 a year earlier.
Kevin Book, managing director at ClearView Energy Partners, emphasized that significant investments and improvements in production would take years. Some Venezuelans expressed concerns over the deal, viewing it as a betrayal of the government’s longstanding stance that national resources should primarily benefit the Venezuelan people.
Harvard University professor Ricardo Hausmann criticized the agreement as "shameful," questioning its legitimacy and the authority of Rodríguez to commit Venezuela to such terms. Lawmakers from both parties have responded to the announcement, with some praising it as a historic opportunity while others condemned it as a corrupt maneuver.
Details regarding the financial responsibilities for infrastructure improvements and the identity of the private operator remain uncertain. Chevron, the only U.S. oil company currently operating in Venezuela, declined to comment on the deal. David Oxley, chief climate and commodities economist at Capital Economics, noted that while the deal could potentially enhance U.S. oil reserves, logistical challenges and the attractiveness of other investment opportunities could deter U.S. oil companies from participating.
Arráez reported from Caracas, Venezuela. Associated Press writer Moriah Balingit and AP Economics Writer Paul Wiseman in Washington contributed to this report.