US gains control over 65 billion barrels of Venezuelan oil

The US has acquired significant control rights over the development of Venezuelan fields with proven reserves of about 65 billion barrels of oil. American company North American Blue Energy Partners has received concessions for 17 fields for a period of 100 years, while the US government has received a stake in the company, rights to purchase oil, and influence over its management.

Details of the agreement between the US and the interim Venezuelan authorities were disclosed by the White House. The Donald Trump administration calls the deal the largest oil agreement in history.

At the same time, there is no transfer of the oil reserves themselves into the ownership of the American state. Control is ensured through a combination of long-term concessions to the American company, a US government stake in its structure, and special rights over management and future production.

American company gets fields for 100 years

Venezuelan authorities granted North American Blue Energy Partners (NABEP) 100-year concessions to develop 17 oil fields. Their proven reserves are estimated at about 65 billion barrels.

For comparison, the White House estimates all proven oil reserves directly on US territory at about 46 billion barrels. Thus, the volume of resources covered by the Venezuelan deal exceeds this figure by about 40%.

NABEP is a private company already operating in Venezuela. As part of the deal, its corporate structure is simultaneously tightly linked to the American state.

The Office of Strategic Capital under the US Department of Defense received a 35% stake in NABEP's parent company. The White House says this stake is being transferred at no cost to American taxpayers and could bring dividends to the US in the future.

US will be able to buy oil at cost

Separate terms of the agreement concern future production. The US State Department received a guaranteed right to purchase 20% of the oil from all current and future fields managed by NABEP at production cost.

American authorities plan to use this resource, among others, to replenish the US Strategic Petroleum Reserve, as well as for the needs of the armed forces and other government agencies.

In addition, the US received a right of first refusal on the remaining 80% of production. This means that if the company decides to sell this oil, the American side will be the first to receive an offer to buy it.

The US government also received a veto right over the appointment of any member of the company's board of directors. The majority of board seats must be held by US citizens, and the agreement with NABEP is governed by US law and falls under the jurisdiction of US courts.

Up to $100 billion promised to be invested in Venezuela

North American Blue Energy Partners plans to invest up to $100 billion in restoring and expanding Venezuela's oil infrastructure. A significant part of the country's fields is currently either barely used or operating well below potential capacity after years of underfunding.

The White House expects that new investments will allow for a sharp increase in production. Part of the additional volumes of Venezuelan oil is planned to be processed at American oil refineries, and the development of the fields is expected to actively use equipment and infrastructure from the US.

Venezuela, in turn, should receive taxes and royalties from the development of resources. According to the American administration's estimate, payments to the Venezuelan budget could amount to about $200 billion over the first 25 years.

Russia and China to lose some influence

The White House separately emphasizes the geopolitical dimension of the agreement. According to the Trump administration, a significant part of the additional fields that will come under NABEP's management were previously controlled or developed by Russian and Chinese companies or structures linked to the former Venezuelan authorities.

Washington sees the new oil model as a way to push Russian and Chinese influence out of the Venezuelan energy sector and simultaneously create a long-term source of oil in the Western Hemisphere.

President Donald Trump previously said that the agreement effectively more than doubles the volume of oil resources over which the US gains economic control and should increase oil supply for the American market in the long term.

Thus, the US does not become the direct owner of 65 billion barrels of Venezuelan oil, but it obtains a combination of a corporate stake, management powers, and preferential rights to future production. It is this structure that the White House calls "majority control" over the respective reserves.

Based on materials from: The White House, UPI