U.S. Close to Major Venezuelan Oil Deal, Sources Say

The Venezuela oil deal with the U.S. has moved from negotiations toward a major agreement, with the Trump administration seeking a U.S. ownership stake in several of Venezuela’s largest oil fields. Axios reported that the proposed arrangement could involve more than a dozen productive fields representing roughly 90 billion barrels of reserves.

U.S. Seeks Bigger Role in Venezuela’s Oil Industry

The negotiations were being led by Secretary of State Marco Rubio and Venezuela’s interim President Delcy Rodríguez. The potential agreement was viewed as a major part of the administration’s strategy to strengthen U.S. energy security and increase American influence across the Western Hemisphere.

Venezuela’s holds the world’s largest proven oil reserves, but years of underinvestment, sanctions and declining infrastructure have left production far below the country’s potential. The Trump administration has been pushing for American companies to play a larger role in rebuilding the industry.

Energy Secretary Chris Wright was also expected to travel to Venezuela to discuss ways U.S. companies could increase oil production. The administration has argued that greater Venezuelan output could eventually provide additional crude supplies for American refineries.

Trump Announces Major Agreement

The negotiations quickly advanced after Axios first reported the potential deal. On Aug. 28, Trump announced that the United States had secured majority control of more than 65 billion barrels of Venezuela’s proven oil reserves through a partnership involving private businesses.

Trump described the agreement as an unprecedented oil deal and said it would help strengthen U.S. energy security. Rubio said the arrangement could bring nearly $100 billion in private investment to Venezuela while supporting the rebuilding of its energy sector.

Questions Remain Over the Deal

Despite the announcement, important details about the agreement remain unclear. Officials have not fully explained which companies will participate, how the U.S. ownership structure will work or how quickly Venezuelan oil production could increase.

The country’s aging infrastructure also presents a major challenge. Several oil fields under consideration require substantial investment before they can reach higher production levels. Analysts have warned that security concerns, transportation problems and Venezuela’s damaged energy infrastructure could slow the process.

The deal could also face legal and political challenges inside Venezuela’s . Critics have questioned whether the country’s interim government has the authority to make such a far-reaching agreement involving national oil resources.

For Washington, however, the agreement represents a major expansion of U.S. involvement in Venezuela’s energy sector and could reshape the country’s oil industry for years to come.

Source : axios.com