A new agreement between the United States and Venezuela, which grants a US-led company 100-year concessions over 17 Venezuelan oilfields, is raising significant legal and operational concerns. The deal, announced by US President Donald Trump and confirmed by Venezuela's interim President Delcy Rodriguez, puts an estimated 65 billion barrels of recoverable oil under Washington's control. This volume surpasses total US proved oil reserves of 46 billion barrels and represents approximately 22% of Venezuela's total reserves. Analysts estimate the full development of these fields could take more than 25 years.
The legality of the agreement is being heavily questioned by experts and lawyers. Article 12 of Venezuela's constitution states that hydrocarbon deposits are inalienable property of the government, and Article 302 reserves the petroleum industry to the state, requiring the state to hold all shares of PDVSA, the state oil company. While January's hydrocarbons reform loosened rules for joint ventures, it did not authorize a 55% foreign ownership stake, which the US expects to hold in the partnership. This level of foreign control would likely require constitutional changes.
The deal's opacity is also a point of concern, as it did not go through a competitive process and its negotiation was kept secret until recently. Major oil producers are wary of directly competing with the US government, and some find the involvement of Venezuelan businessman Alejandro Betancourt, whom Swiss prosecutors previously sought to arrest for financial crimes, unsettling. Ricardo Hausmann, a former Venezuelan planning minister, argues that Rodriguez lacks the constitutional authority to commit Venezuela to such a deal, leading some to believe major American oil companies will not take it seriously due to its potential lack of longevity. The US would reportedly have veto power over the board of the new company, North American Blue Energy Partners (NABEP), and the agreement is governed by US law.
