How the USA is making money from the billion-dollar oil deal with Venezuela

Deal with Venezuela

Now Hegseth could make billions

The oil deal between the USA and Venezuela should cost US taxpayers nothing, but bring in billions of dollars for the Pentagon. How this is supposed to work.

With a multi-billion dollar deal between Venezuela and the USA secures itself Washington controls a fifth of Venezuela’s crude oil reserves and earns a lot from its extraction. However, the latest agreement raises significant concerns among energy experts and lawyers about its legality and transparency. US President Donald Trump announced the deal on Friday and the Venezuelan interim president Delcy Rodríguez confirmed it.

According to a White House briefing released late Monday (local time), the Venezuelan government granted the private Venezuelan company North American Blue Energy Partners (NABEP) 100-year oil production concessions in 17 oil fields. These oil fields contain around 65 billion barrels of oil – about a fifth of Venezuela’s total proven oil reserves, according to the US Energy Information Administration. For comparison: According to the White House, the USA currently has proven reserves of around 46 billion barrels.

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NABEP granted the US Department of Defense a 35 percent stake in its parent company. This could be worth hundreds of billions of dollars to the Pentagon and provide corresponding dividends. The USA therefore makes a significant profit from oil mining in Venezuela.

The U.S. State Department also has the right to purchase 20 percent of the production of all current and future fields from NABEP at cost. This ensures a stable supply of inexpensive oil and thus enables the replenishment of the United States’ strategic oil reserves. NABEP granted the Foreign Ministry a right of first refusal for the remaining 80 percent of production.

For Venezuela, the deal is expected to secure $100 billion in investments and an expected $200 billion in royalties and taxes over the first 25 years through NABEP. “These proceeds provide important financial support to the current and future Venezuelan government and will help finance reconstruction and social development,” the White House wrote. The agreement will also be implemented “at no cost to the American taxpayer.”

For Trump, the deal comes at a strategically good time: In view of rising gasoline prices as a result of the Iran war, the new barrels from Venezuela are intended to help replenish the US’s strategic oil reserves. This had recently fallen to its lowest level in 44 years.