The Daily Journal. — The White House said Monday that the oil agreement reached with Venezuela will allow the United States to secure its “energy dominance for the next century” at no cost to American taxpayers.
“This deal secures our energy dominance for the next century, all at zero cost to the United States,” President Donald Trump’s administration said in a fact sheet released after announcing the energy agreement with Caracas.
The U.S. government says the deal grants it economic and governance rights over North American Blue Energy Partners (NABEP), a company that Venezuelan authorities granted rights to develop 17 oil fields containing around 65 billion barrels of proven reserves.
The operation would significantly expand Washington’s access to Venezuelan oil resources without requiring the federal government to make a direct investment to finance the projects.
35% stake and preferential access to oil
As part of the agreement, NABEP granted the Department of War’s Office of Strategic Capital a 35% equity stake in its corporate parent company.
According to the White House, NABEP granted the stake “at no cost to the American taxpayer,” and it could represent “hundreds of billions in value and dividends for the United States.”
The structure also guarantees the State Department the right to purchase, at cost, 20% of the oil production from current and future fields that NABEP operates.
Washington will also hold a right of first refusal on the remaining 80% of production, giving the U.S. government priority access to the crude in emergency situations.
The White House said the United States could use this supply to help replenish the U.S. Strategic Petroleum Reserve and meet military requirements and other sensitive needs.
“NABEP has granted the U.S. State Department the right to purchase, at production cost, a guaranteed 20% of the production extracted,” the statement said.
Washington gains governance powers
The agreement also gives the United States broad authority over NABEP’s corporate structure.
According to the White House, the U.S. government will have veto power over the appointment of any board member, and U.S. citizens must make up a majority of the board.
In addition, U.S. auditors, lawyers and advisers will work with the company, while U.S. law will govern the agreement between Washington and NABEP, with U.S. courts holding jurisdiction over it.
The White House described these provisions as safeguards for U.S. economic and strategic interests in the project.
Up to $100 billion to restore production
While Washington would gain an equity stake and supply rights, NABEP plans to invest up to $100 billion in Venezuela’s oil infrastructure to increase production from the fields covered by the concessions.
The Trump administration said U.S. refineries will process millions of barrels of new production and that the projects will use U.S. equipment and infrastructure.
“U.S. refineries will process millions of barrels of new Venezuelan production, while U.S. drilling rigs and infrastructure will support extraction,” the White House said.
The U.S. government also estimates that under Venezuela’s new hydrocarbons framework, NABEP could pay around $200 billion in taxes and royalties during its first 25 years of operations.
Trump’s hemispheric strategy
The White House linked the agreement to Trump’s strategy to strengthen U.S. control over energy supply chains in the Western Hemisphere and reduce Chinese and Russian influence in Venezuela.
According to the administration, companies linked to Russian and Chinese interests previously controlled or operated several of the fields included in the project.
Washington argues the agreement will create a “stable, low-cost” energy supply within the hemisphere and strengthen U.S. energy security for decades to come.
The White House described the project as a combination of private investment and strategic federal participation aimed at securing preferential access to one of the world’s largest oil reserves. At the same time, Venezuela seeks to attract capital and technology to restore its production capacity.
