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WASHINGTON — Besides a social media post from President Trump, the White House has said little about what he is calling “THE BIGGEST OIL DEAL IN WORLD HISTORY” in Venezuela.
Trump said the agreement announced Friday night would give the United States a stake in Venezuela’s vast oil reserves, a step toward his goal of extracting energy from the country after American forces captured then-President Nicolás Maduro in a middle-of-the-night raid in January and brought him to New York to face federal drug trafficking charges.
Venezuela’s acting president, Delcy Rodríguez, described the deal as a step toward economic recovery that will modernize the country’s oil industry.
But the answers to questions such as how soon the reserves could be drilled and who will pay to make it happen were not immediately clear. No text of any agreement has been released.
The U.S. government and an unnamed private operator in Venezuela formed a new private company that was given the rights to vast, untapped oil fields for 100 years.
A statement from Rodríguez said the deal involves the development of 17 fields with a proven potential of 65 billion barrels. It said the agreement could draw $100 billion in investment into Venezuela’s oil industry and yield over $209 billion in taxes for Caracas.
Trump said the agreement was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Rodríguez.
The deal gives the United States 55% effective output of the new private company, including an ownership stake and rights to buy oil at cost. American purchases of the oil will go toward the U.S. strategic oil reserves along with the military, according to a U.S. official who was not authorized to discuss the matter publicly and spoke on the condition of anonymity.
The company would be the second largest corporate holder of proven reserves after Saudi Aramco, according to the official.
Trump says the deal will help lower gas prices for Americans. That is an important objective for the Republican president as the Iran war slows the shipping of Persian Gulf oil and keeps prices elevated months before November elections in the United States.
But experts have repeatedly warned that Venezuela’s dilapidated oil infrastructure will take years and billions of dollars to repair. A substantial boost in production is not expected to happen quickly.
The deal could be “helpful in the long run, but it’s not going to do anything to change the price of gasoline at the retail station for Labor Day weekend,” said Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University.
Source: Read the original article on www.washingtontimes.com
