The Trump administration's recent agreement with Venezuela for a large-scale oil deal has sparked controversy over the U.S.'s expanding influence in the Venezuelan oil industry.
The Venezuelan government has emphasized that the agreement will help revive its oil sector, which has been severely impacted by sanctions, and boost the economy. However, some critics have raised concerns about it being a 'new form of American colonialism.'
Venezuela Expects $209 Billion in Revenue
U.S. Secures Control Over 6.5 Billion Barrels of Oil
According to Reuters, Delcy Rodriguez, the interim president of Venezuela, stated in a late-night address on August 29 that the energy agreement with the U.S. will be valid for 25 years and aims to increase oil production to 1.5 million barrels per day.
Rodriguez described the agreement as a 'historic' deal that will aid in Venezuela's economic recovery and increase government revenue. She estimated that, based on a benchmark price of $65 per barrel, the agreement could generate approximately $209 billion (about 288.5 trillion won) for the Venezuelan government. Additionally, she noted that around $19 per barrel from the produced and sold oil would directly benefit Venezuela, significantly aiding government finances.
Rodriguez also emphasized that Venezuela will maintain 'ownership and sovereignty' over its natural resources, stating that the agreement aims to support the recovery of strategic industries, including the oil sector, which has been severely affected by sanctions, by utilizing U.S. capital, technology, and operational expertise.
President Trump announced on August 28 that the U.S. has signed a major contract to directly participate in Venezuela's oil development, calling it 'the largest oil contract in world history.'
While specific details of the contract have not been disclosed, the Associated Press reported that the Trump administration plans to establish a new private company in collaboration with Venezuelan private operators to manage the country's oil reserves.
This new private company is expected to be granted rights to oil field development for 100 years, with the U.S. securing effective rights to 55% of the new company's total production, including ownership stakes and rights to purchase oil at cost. The targeted oil reserves are reported to be around 6.5 billion barrels.
In this context, the Wall Street Journal reported on August 30 that the U.S. government will collaborate with Alejandro Betancourt Lopez, who owns North American Blue Energy Partners (NABEP), Venezuela's second-largest private oil company.
Critics Call U.S. Oil Deal a New Form of Colonialism
The Trump administration's plan appears to be aimed at stabilizing energy prices by securing Venezuelan oil as a new supply source amid rising gasoline prices due to the Iran War, especially with the upcoming midterm elections in November.
However, there are concerns that even with significant investment, Venezuela's oil production may not increase substantially in the short term. The local oil production infrastructure has deteriorated significantly due to long-term underinvestment and sanctions, and restoring it will take considerable time. The Associated Press estimates that it could take years to see a meaningful increase in production.
Legal obstacles within Venezuela also pose a challenge. According to the Wall Street Journal, the Venezuelan constitution stipulates that natural resources, including oil, belong to the state and cannot be transferred to other owners, raising the possibility of legal disputes during the investment and operational processes.
Venezuela, which holds the world's largest oil reserves, has strengthened state control over its oil industry since nationalizing it in the 1970s. Earlier this year, the U.S. captured President Nicolás Maduro during a military operation and subsequently recognized Rodriguez as interim president, pushing for increased foreign investment in Venezuela's oil and mining sectors.
There has also been internal dissent in Venezuela regarding the energy agreement. The New York Times reported on August 29 that criticisms have emerged, labeling the U.S. dominance in the oil industry as 'a new form of American colonialism.'
Dario Nava, a former PDVSA (Venezuelan state oil company) manager, told the NYT, 'The U.S. will manage our oil industry, and in doing so, we will lose our sovereignty.' Rafael Ramirez, a former PDVSA president and loyalist to Hugo Chávez, who is currently in exile, criticized Rodriguez on X, stating, 'Rodriguez has opened the door to a new form of American colonialism.'
* This article has been translated by AI.
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