New details were released by the White House on Monday of the oil deal between Venezuela and the United States, after President Donald Trump late last week announced Venezuela would open 17 oil fields for 100 years to a U.S.-backed private company.
The deal, the White House said, will secure partial U.S. control of more than 65 million barrels of oil reserves in Venezuela. It gives the U.S. “powerful governance rights, economic ownership, and guaranteed low-cost off-take from a new private Venezuela oil champion.”
“This groundbreaking privatization and investment in Venezuela’s energy sector is a key step in the Trump Administration’s three-part plan of stabilization, reconstruction and democratic transition,” the White House said.
The U.S. will, through the Department of War’s Office of Strategic Capital, take a 35% stake in the parent company of Venezuela’s second-largest private oil producer, North American Blue Energy Partners.
The U.S. also will get the right to purchase 20% of the oil that the company produces and it will go toward the U.S. Strategic Petroleum Reserve, which was depleted after the Biden administration sold oil to bring down gas prices after Russia invaded Ukraine.
The oil extracted in Venezuela will be heavy crude, which is more difficult to refine, and it’s still likely several years out from being delivered, meaning the deal won’t have an immediate impact on high gas prices U.S. consumers are seeing at the pump.
Trump, during an Oval Office event Monday, said the U.S. has a “great relationship with Venezuela” and they are working as a team to extract oil.
“We’re making a fortune and they’re making a fortune,” he said. “We have Exxon going in, we have Chevron going in, we have our big oil companies going in, and everybody’s bidding. And you know, there are those that say it was the greatest deal ever made. Let’s see what happens.”
Trump went on to say that he believes the deal will be beneficial for Venezuela because some of the world’s wealthiest companies will be investing in the country.
The deal comes roughly nine months after the U.S. went into Venezuela to capture President Nicolás Maduro and remove him from the country.
At the time of Maduro’s capture, Trump said the military action would pave the way for oil companies to tap into Venezuela’s vast oil reserves and sell “large amounts” to other countries.
Amid the war with Iran, which has seen both sides trade strikes in recent days, gas prices around the world and in the U.S. have gone up.
While Trump’s announcement with Venezuela is encouraging news for U.S. oil companies, experts warn it won’t lower prices any time soon.
Patrick De Haan, an expert at GasBuddy, said other market factors could help bring down costs at the gas pump but the benefits from the increased output from Venezuela would take “years to full materialize” and won’t make changes in the near term.