U.S. President Donald Trump has announced a major oil agreement with Venezuela that gives a U.S.-backed joint venture majority control over production from oil fields containing over 65 billion barrels of proven oil reserves.
Under the deal, the joint venture will receive an effective 55% share of production from the 17 oil fields, making it the second-largest private oil company globally by reserves. Trump said the agreement will “more than double” U.S. oil reserves and help bring down fuel prices in the United States.
For Venezuela, the agreement provides a framework to revive its struggling energy sector. Interim President Delcy Rodríguez said the deal will use the country’s vast reserves to support economic growth, job creation, increased income for workers and national development.
U.S. Secretary of State Marco Rubio said the venture is expected to mobilise nearly US$100 billion in private investment, support thousands of high-paying jobs and help drive the reconstruction of Venezuela’s economy.
The agreement marks a dramatic turn in U.S.-Venezuelan relations following the January military operation that removed former President Nicolás Maduro from power. Since then, Venezuelan lawmakers have approved legislation to make it easier for foreign companies to participate in the country’s oil industry.
According to CNN, the deal also gives a private company 100-year concessions for the oil fields. For Venezuela, the agreement could provide the investment needed to rebuild an oil industry built around its oil reserves, while giving the United States a major role in developing one of the world’s largest oil reserves.
