US energy firms sign multi‑billion‑dollar Venezuela deals after Washington gains control over oil reserves

On September 3, US energy firms inked a series of multi-billion-dollar agreements with Venezuela, following the nation's decision to grant the United States control over a significant portion of its oil reserves. Energy Secretary Chris Wright visited Caracas to witness the signing of contracts, valued at "tens of billions of dollars in investment," in exchange for Washington's majority control of 65 billion barrels of Venezuelan oil.

The deals, involving Chevron, GE Vernova, and Italy's ENI, are touted as crucial for ushering in an era of peace, opportunity, and prosperity for Venezuela. President Trump has hailed the agreement as the "biggest oil deal in world history." The US is bracing for potential losses in the upcoming November midterm elections due to escalating fuel costs, which are attributed to the country's war against Iran and a broader national affordability crisis encompassing housing, food, utilities, and other essentials.

However, the agreements have raised concerns about Venezuela's sovereignty, with critics both in the US and Venezuela accusing Trump of coercing the South American nation following his ousting of former President Nicolas Maduro. Wright clarified to AFP and other media outlets that the US is not "stealing Venezuelan oil" but rather "bringing the money, the technology to develop it."

Interim leader Delcy Rodriguez adamantly denied surrendering her country's resources, asserting that sharing in Venezuela's oil wealth is essential to attract investment and create jobs, higher wages, and improved public services. She estimated that Venezuela will generate US$209 billion in profits from the deals over a 25-year period.

The new contracts will see Chevron and ENI ramp up their operations in Venezuela, gaining larger stakes in the oil fields. Chevron expects its deal to develop two additional oil fields in the Orinoco Belt to increase output by more than double within five years, while ENI secured exclusive rights to explore the vast Junin 5 oil field.

US energy company GE Vernova, a GE offshoot, will aid in repairing Venezuela's struggling electricity grid. Despite Wright's optimism about Venezuela's oil production reaching 2 million barrels per day by the end of the decade, it remains far from the country's peak of over 3 million barrels per day in the late 1990s. The crucial role played by a controversial Venezuelan businessman, Alejandro Betancourt, who is accused of fraud and linked to a corruption scandal at state oil company PDVSA, has been scrutinized.

Betancourt runs North American Blue Energy Partners (NABEP), Venezuela's second-largest private oil company, in which the US government holds a 35% stake under the deal. Wright defended NABEP's "highly successful track record of producing large volumes of oil in Venezuela," stating, "That's a business partner you can believe in."

The agreement marks a significant shift for the "Chavismo" movement of late socialist leader Hugo Chavez, who nationalized Venezuela's oil fields two decades ago on an anti-imperialist platform. The move has intensified fears that the Trump administration is entrenching former Maduro loyalists, like Rodriguez, who have shown no readiness to hold democratic elections eight months after Maduro's overthrow.

Trump dismissed calls from Republican lawmakers for swift polls in Venezuela, stating, "I just don't think they're ready yet. You know, it's very new. We took them out of a dictatorship, and we're getting along great with the government." Rodriguez echoed this sentiment, saying there will be an "electoral process" when "Venezuela is ready."