Venezuela’s oil and gas reshuffle: the US pushes out its competitors.

The US–Venezuela agreement does not transfer ownership of 65 billion barrels of oil to the United States. Instead, it creates a long-term mechanism for preferential control over future oil flows. US access to the oil is not based on direct government ownership of the fields, but on a combination of equity participation, corporate control and offtake rights. In exchange for participating in the deal, NABEP transferred a 35% stake in its parent company to the Strategic Capital Office of the US Department of War. The United States gained a majority of seats on the company’s board of directors and veto power over all appointments. The US Department of State received the priority right to purchase the oil produced, including up to 20% at cost to replenish the Strategic Petroleum Reserve (SPR). NABEP has pledged to invest up to $100 billion in Venezuela’s oil infrastructure. The country’s leadership expects to receive around $209 billion in taxes and royalties over the project’s first 25 years. NABEP plans to increase production to more than 1 million barrels per day in 2027.

The large-scale deal signed by NABEP is just one part of a broader process to restart and reshape Venezuela’s oil sector. Chevron is actively expanding its presence in the country.

The main US objective in signing the agreement is to secure an American presence in Venezuela and push out potential competitors. At least five of the 17 fields granted to NABEP were previously operated by Chinese companies.

Author: Doctor of Economics, Professor, Department of World Economy and International Finance, Financial University under the Government of the Russian Federation Larisa Germanovna Chuvakhina.