WASHINGTON: President Donald Trump says the United States has secured majority control of more than 65 billion barrels of Venezuela’s proven oil reserves, a sweeping proposal aimed at reviving the country’s struggling energy sector, attracting American investment and increasing crude supplies to U.S. refineries.
Trump announced the agreement Friday but provided few details about how it would work, which oil fields or companies would be involved, or how Washington would exercise control.
He said the arrangement was reached through a partnership with private businesses and would come at no cost to American taxpayers.
The announcement followed weeks of negotiations between Washington and Caracas over long-term access for U.S. companies to Venezuelan oil fields. Venezuelan officials are expected to sign agreements next week granting new exploration and production rights to several companies, particularly U.S. firms.
Sources familiar with the negotiations told Reuters that a lease model was being considered, under which oil fields could be auctioned to U.S. producers.
However, the proposal could face legal and constitutional challenges because Venezuela’s government retains control over key parts of the oil industry. A list reviewed by Reuters identified fields in the Orinoco Belt and Lake Maracaibo regions.
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Secretary of State Marco Rubio called the arrangement a benefit for both countries, saying it could provide the United States with a stable supply of lower-cost crude and help ease gasoline prices. For Venezuela, he said, the agreement could attract nearly $100 billion in private investment, create thousands of high-paying jobs and support economic recovery.
Venezuelan interim leader Delcy Rodriguez also welcomed the plan, saying it would increase production through the development of 17 strategic oil fields and generate an estimated $209 billion in tax revenue.
“These investments will contribute not only to the recovery and modernization of our industry, but also to our country’s economic growth, the energy security of our hemisphere, and greater balance in international markets,” Rodriguez said.
Venezuela has the world’s largest proven oil reserves but produces only about 1.25 million barrels per day, a fraction of its potential. Years of underinvestment, mismanagement and U.S. sanctions have weakened its energy infrastructure and sharply reduced production.
Analysts cautioned that the agreement’s impact remains uncertain because its legal and financial structure has not been fully disclosed. David Goldwyn, president of Goldwyn Global Strategies, questioned whether a U.S. government lease over Venezuelan oil fields would have a legal basis under the country’s constitution and hydrocarbons law.
Goldwyn also said political uncertainty, an unreliable power grid, limited export capacity and government control over the industry could continue to discourage major investment.
The proposal is unlikely to bring immediate relief at U.S. gas stations. Venezuela’s heavy crude requires significant investment in production, transportation and refining infrastructure, meaning any substantial increase in exports could take years.
The deal comes as the Trump administration seeks additional sources of crude for U.S. refineries and explores ways to replenish the Strategic Petroleum Reserve. Lower oil prices and increased Venezuelan production could also help the administration address consumer concerns over gasoline costs ahead of the November midterm elections.
Venezuela’s oil industry has been controlled by state-run PDVSA since nationalization in the 1970s. Under former President Hugo Chavez, Caracas further tightened its grip on the sector, forcing foreign producers into state-led joint ventures and expropriating some assets, including projects operated by ExxonMobil and ConocoPhillips.
Under former President Nicolas Maduro, Venezuelan oil production declined further, leaving the country with enormous reserves but limited capacity to develop them
