Trump, owner of Venezuela
The unprecedented deal for the US to exploit the country’s oil aligns the president’s interests with those of Delcy Rodríguez
Donald Trump’s announcement that he will control the production of almost a quarter of Venezuela’s oil has unleashed a torrent of criticism, even from within Chavismo, and left many questions unanswered. The agreement, announced on social media and confirmed by the interim president, Delcy Rodríguez, is the product of an opaque negotiation conducted behind the Venezuelan public’s back, which still does not know its terms and conditions. What is not surprising is that Venezuela’s natural wealth is ending up in U.S. hands. Trump made it clear from the day he ordered an attack on Caracas and the kidnapping of President Nicolás Maduro, now imprisoned in New York, that his real objective was Venezuelan oil. Eight months later, he has announced an unprecedented deal with a leader who was not elected by her citizens and who is collaborating with Washington because it is Washington that put her in office in the first place.
Few details of the deal are known. The United States will become a 55% investor in a private company that will do business with the world’s largest oil reserves. According to a statement by Rodríguez, the company will assume control of 17 fields in the Orinoco Belt and Lake Maracaibo with proven reserves of 65 billion barrels. The concession will last 25 years, renewable. The agreement projects a benefit to Venezuela’s coffers of $19 per barrel, assuming a price of $65.
Venezuelans have suddenly learned that 22% of their oil reserves will be controlled and exploited by the United States. Rodríguez says this formula represents a $100 billion investment in Venezuela’s oil industry and potential tax revenues of $209 billion that the skeletal Venezuelan state desperately needs. Little else. No one knows who will fund those investments and on what terms, what the timelines are to start operations, which companies will carry out the investment and, above all, who will oversee the operations and under which jurisdiction they will fall.
The structure of the deal is itself unusual. Faced with the reluctance of major oil companies to invest in a country without clear rules, Trump decided to bet on his own government, through the War Department. In other words, the investor is the White House. Adding to the suspicion, the consortium will be led by Venezuelan national Alejandro Betancourt, who is under investigation in Switzerland and Spain for allegedly participating in a scheme that laundered billions of dollars embezzled from state oil company PDVSA.
The U.S. president, whose polls suggest his party could be punished in the November midterm elections largely because of voters’ exhaustion with inflation, has promised that access to Venezuelan oil will lower gas prices. That will not happen. Restoring Venezuela’s deteriorated oil industry will take years. Venezuela will see more jobs and a revitalization of an industry that has been on its knees for years, but it is not clear that will occur in the short term either.
The unease generated by this announcement is also political. What Venezuela urgently needs is democracy and elections. This deal cannot preempt the terms of the necessary transition. Rodríguez and Trump already share too many incentives not to speed up an election call that could remove from power a Chavista structure that has proven very useful to U.S. interests.
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