Venezuela defends sovereignty after Trump oil control claim

Venezuela has defended its 25-year energy agreement with the United States, insisting that it upholds the country's state ownership of oil reserves, countering President Donald Trump's claim of securing majority control over more than 65 billion barrels of Venezuelan crude. Interim President Delcy Rodríguez emphasized that the accord focuses on the development of 17 strategic oilfields, aiming for production exceeding 1.5 million barrels daily, along with eight additional greenfield blocks planned under a broader expansion.

She highlighted that the contractual framework safeguards Venezuela's sovereignty over its natural resources, as stipulated by the constitution, which prohibits the transfer of oil deposits into foreign ownership. Article 12 of the Venezuelan constitution declares that mineral and hydrocarbon deposits within national territory, including territorial waters, the exclusive economic zone, and the continental shelf, belong to the republic, forming part of the public domain and being inalienable and non-transferable.

While Trump announced on Friday that the United States had obtained "majority" control of over 65 billion barrels of proven Venezuelan reserves through a private business arrangement, he did not disclose the full legal terms defining this control. This has created a potential discrepancy between political statements and legal structures.

The agreement is portrayed as an investment and production partnership by Rodríguez's government, rather than a transfer of sovereign assets. The Venezuelan foreign ministry stated that the arrangement for joint exploitation of oilfields and greenfield blocks is designed to preserve state sovereignty over the reserves, stressing that foreign participation does not alter the constitutional title to hydrocarbons before extraction.

This principle is crucial because commercial rights can be extensive without equating to ownership of the resource in the ground, allowing foreign operators while preserving the republic's legal claim over the reserves under the law. The deal aims to rejuvenate an industry hampered by years of underinvestment, damaged infrastructure, and sanctions.

Venezuela possesses approximately 303 billion barrels of proven crude reserves, the largest national total reported by OPEC, but production remains significantly below the peaks achieved before the sector's prolonged deterioration. Rodríguez stated that the bilateral program is designed to raise output above 1.5 million barrels daily, projecting that Venezuela could receive around $209 billion over the agreement's life using an assumed oil price of $65 per barrel.

Separately, arrangements are being pursued with international companies such as Chevron, Repsol, Eni, Shell, and BP. Trump has presented the agreement as a significant gain for US energy security, stating that Venezuelan oil obtained through the arrangement would replenish the US Strategic Petroleum Reserve, which has dwindled to levels not seen in four decades following substantial withdrawals due to supply disruptions and geopolitical shocks.

Nevertheless, substantially increasing Venezuelan output will necessitate substantial investment, rehabilitation of aging fields, pipelines, power systems, and export facilities, along with confidence that contracts will remain enforceable over their stated duration. These constraints suggest that additional barrels are unlikely to reach global markets immediately at the scale suggested by Washington's political rhetoric.

The constitutional issue may also influence investor risk, as a transaction purporting to alienate the reserves themselves would conflict directly with Article 12 of the Venezuelan constitution.