The Trump administration is reportedly in discussions with Venezuela to acquire a significant stake in several of the country's oil fields. This potential deal, first reported by Axios and corroborated by other outlets, could involve more than a dozen operational oil fields, with some reports suggesting the possibility of a 100-year lease. These fields are estimated to hold approximately 90 billion barrels of proven reserves, which would more than double current US reserves and represent nearly a third of Venezuela's total proven reserves of around 300 billion barrels.
The negotiations are reportedly led by US Secretary of State Marco Rubio and Venezuelan interim President Delcy Rodríguez, with Secretary of Energy Chris Wright preparing a visit to Venezuela to encourage US companies to increase production. The agreement aims to allow private companies, including US firms, to modernize and exploit these fields, which would generate more revenue for Venezuela. This move follows a relaxation of US sanctions to permit American oil companies and contractors to operate in Venezuela, whose oil production has declined due to economic crisis and underinvestment.
While the deal could significantly increase Washington's influence in Venezuela's energy sector and potentially provide a steady flow of Venezuelan crude to US refineries, its legal and constitutional implications are being questioned. Venezuela's current hydrocarbon laws do not explicitly allow for the leasing of oil fields, and the constitution reserves core industry activities to the state. Experts, including economist Ricardo Hausmann, have raised concerns about the legitimacy of an interim government making such long-term commitments. However, recently reformed oil legislation does permit the operation of fields through joint ventures and production sharing contracts, which could be a legal pathway.
From the US perspective, securing cheaper and increased oil supply could help mitigate rising gasoline prices ahead of the November legislative elections and aid in replenishing the Strategic Petroleum Reserve, which currently holds about 290 million barrels. For Venezuela, it represents a potential opening to private capital in a sector historically dominated by the state-owned PDVSA, which has suffered from inefficiency and corruption. Venezuela currently produces around 1.25 million barrels per day, a recovery from its lowest levels but still far from its peak of over 3 million barrels per day.
