Venezuela’s National Assembly approved a deal on Tuesday handing the United States control of about one-fifth of the country’s oil reserves, cementing Washington’s grip on a government it helped install after toppling Venezuelan President Nicolás Maduro in January.

Venezuela sits on the world’s largest proven crude reserves — roughly 300 billion barrels, according to OPEC figures — but years of underinvestment, sanctions and mismanagement have hollowed out its oil industry, with output falling from around three million barrels per day in the late 1990s to well under one million in recent years.

US officials defended the multibillion-dollar agreement on Tuesday, saying it would lower oil prices for Americans and counter Russian and Chinese influence on Washington’s doorstep. However, major questions remain about the deal, which comes as Washington maintains an unprecedented grip on the government in Caracas.

Late on Tuesday, US Energy Secretary Chris Wright arrived in Venezuela, with a signing of the agreement set for Wednesday. Oil giant Chevron is expected to announce a major expansion in Venezuela on the same day. Chevron was one of the last Western majors still operating in the country, having maintained a limited presence through US Treasury licenses that allowed it to pump and export Venezuelan crude.

Trump had earlier met oil executives at the White House as he tries to tame petrol prices that are spiralling because of the Iran war, with his administration hoping the Venezuela deal could help. “We are unleashing American Energy Dominance!” Trump said on his Truth Social network after the meeting.

In a Spanish-language interview posted on Tuesday to YouTube, Secretary of State Marco Rubio told US-based Venezuelan journalist Sergio Novelli that a private company was working with the United States to “normalize the Venezuelan economy.”

“Essentially, this is now an agreement with the US government — specifically involving the Defense Department, which holds a special account allowing it to take possession of a certain percentage of these assets,” Rubio said.

“Now, we have a system where this company will increase production. With US support, it will be able to attract the private investment needed to develop the productive capacity of these fields,” Rubio said, adding that the “vast majority” of the 17 fields were “in Chinese and Russian hands” until now.

Under US control

In Caracas, some opposition lawmakers abstained from the show-of-hands vote to approve the US deal, arguing they should first be able to view the written terms. “We need and are obliged to know what is written in the fine print,” opposition lawmaker Luis Emilio Rondón said.

National Assembly Chief Jorge Rodríguez, however, said the money from the deal would help Venezuelans. “Who benefits from this oil if it stays underground?” said Rodríguez.

Venezuela’s Defence Minister Gustavo González López gave the deal full military backing, describing it as “prosperity and well-being for the country.” “Turning a political difference into an economic cooperation agreement is simply a decision to choose peace; it is not subordination,” he said.

The deal granting the US preferential access to 17 oil fields will notably see the takeover of facilities previously run by Russian and Chinese companies.

One of the most controversial aspects is the involvement of Alejandro Betancourt, a Venezuelan businessman linked to shady dealings under the late Hugo Chávez’s socialist administration. Betancourt runs North American Blue Energy Partners (NABEP), Venezuela’s second-largest private oil company, in which the US government is taking a 35% stake under the deal. He was accused of involvement in a corruption scheme at Venezuela’s state-run PDVSA oil company.

But a US official said Betancourt was a “proven operator,” while acknowledging that geopolitics sometimes involved dealing with “imperfect” characters. “I’m not nominating anyone for sainthood here. What I am telling you is that this is a person that, in the past, has been helpful to the United States government,” the official said.

Under the deal, NABEP will grant Washington the right to buy 20% of the oil pumped by the firm at production cost, the White House said. US citizens must constitute a majority of the firm’s board of directors, giving Washington effective control, and the US government will have veto power over its members.

The official said US control would end corruption in the run-down Venezuelan oil industry while stopping Caracas from giving much of its supplies away to its ally Cuba. “It was used as a personal piggy bank” by Maduro’s government, the official said.

Cheaper oil is a priority for the Trump administration ahead of crucial US midterm elections in November, in which his Republican Party could lose control of Congress. How quickly Venezuela’s dilapidated fields can actually ramp up production — and whether Wednesday’s signing answers lawmakers’ questions about the written terms — will shape the deal’s practical impact.

Source: Euronews (Additional sources • AFP)