WASHINGTON/CARACAS – The United States and Venezuela are negotiating a far-reaching agreement that would give American companies long-term access to a large number of Venezuelan oil fields. The talks concern seventeen fields with an estimated combined proven oil reserves of 90 billion barrels. This is reported by Axios, Bloomberg and Reuters, based on sources involved in the negotiations.
According to Axios, the talks go beyond merely granting American oil companies permission to produce in Venezuela. Washington wants to obtain a direct stake in the oil fields. The discussions are reportedly led on the American side by Secretary of State Marco Rubio and on the Venezuelan side by interim president Delcy Rodríguez.
Reuters confirms the negotiations based on its own sources. The news agency describes an agreement under which the US government would secure a group of Venezuelan oil fields for long-term development by American companies. The oil produced would then be made available for delivery to the United States.
Hundred-year lease
The legal structure is still being negotiated. According to Reuters, a lease system is being considered, under which individual oil fields would be allocated to American producers through a tender process. Bloomberg reports that a lease period of one hundred years for various fields has even been discussed. However, the terms have not yet been finalised and may still change.
Reuters has seen a list of seventeen fields under discussion. These include undeveloped oil fields in the Orinoco Belt and older production areas around Lake Maracaibo. Some of these are currently operated by a Chinese company that was awarded a contract under the government of former president Nicolás Maduro.
Venezuela holds approximately 300 billion barrels of proven oil reserves — the largest in the world. Oil production has, however, fallen far short of that potential in recent years. The country currently produces approximately 1.25 million barrels per day.
Legal obstacles
An agreement giving the United States direct stakes in Venezuelan oil fields could be legally contentious. The Venezuelan constitution reserves key activities in the oil industry for the state, and current legislation does not provide for regular leases of oil areas. Recent legislative changes do allow for joint ventures and production agreements with foreign companies. Legal experts therefore expect that any deal could lead to constitutional and legal challenges.
For President Donald Trump, the plan fits within his drive to make American energy supply less dependent on other regions. The war in Iran and disruptions to global oil markets have further increased that urgency. The US Strategic Petroleum Reserve has also shrunk to approximately 290 million barrels — its lowest level in decades.
US Energy Secretary Chris Wright is reportedly planning to travel to Caracas in the near term to discuss increasing Venezuelan oil production further, according to Axios. When an agreement might be signed remains unclear. None of the three news organisations report that a definitive deal has been reached.
