In the biggest oil deal in world history, President Donald Trump has secured U.S. majority control of more than 65 billion barrels of Venezuela’s 303 billion barrels of proven oil reserves. This agreement vastly expands current U.S. reserves of roughly 46 billion barrels.
Although the United States is a net exporter of oil and fuel, it still imports significant amounts of oil. That’s because U.S. oil is light and lends itself to making gasoline. Venezuelan oil, by contrast, is heavy, which can more easily be distilled into asphalt, industrial oils, diesel and jet fuel.
In connection with this agreement, the Venezuelan interim authorities have granted North American Blue Energy Partners (NABEP), a privately held oil company that is the second-largest private Venezuelan oil producer, 100-year concessions for 17 oil fields with proven reserves of approximately 65 billion barrels.
Millions of barrels of new Venezuelan output will be processed through U.S. refineries and pumped with American rigs and infrastructure, supporting billions in investment in the United States and thousands of jobs. Moreover, many U.S. refineries are well-suited for Venezuela’s heavier crude, as they were mostly built in the 1970s, when Venezuela was one of America’s primary sources of oil.
This groundbreaking privatization and investment in Venezuela’s energy sector is a key step in the United States’ three-part plan of stabilization, reconstruction and democratic transition. Private-sector led growth in production, output, and investment in Venezuela is a key precondition to driving reform and a democratic transition.
NABEP has developed a plan to scale production by investing up to $100 billion in new oil infrastructure in Venezuela, helping to drive economic growth, support thousands of high-paying jobs in Venezuela, and lead to tens of billions in broader economic activity.
NABEP will pay an expected $200 billion in royalty and tax payments over the first 25 years, representing critical revenue for current and future Venezuelan governments to fund reconstruction and social development.
After years of underinvestment and mismanagement, the majority of Venezuela’s oil fields are not producing or vastly underproducing. By investing in a proven private operator with a track record of scaling production in the country, who will be able to raise private American capital to fund capital expenditures, Venezuela has a historic opportunity to revitalize its key sector, drive oil output growth, and grow its economy.
The United States is sponsoring reconciliation talks between the 2015 National Assembly and the interim authorities – a process which has already resulted in reforms to the Venezuelan judiciary, the release of hundreds of political prisoners, and efforts to finance reconstruction following the devastating June earthquakes. Additional meetings are planned for September.
This new oil deal is only the latest effort by the United States to forge new supply chains in the Western Hemisphere in order to revitalize U.S. manufacturing and energy sectors after years of globalist decline.