President Donald Trump calls his new agreement with Venezuela “the biggest oil deal in world history.” Perhaps someday it will deserve the title. But there is an enormous distance between announcing a breathtaking deal and making one work.
The agreement is undeniably audacious. North American Blue Energy Partners has received rights to develop 17 Venezuelan oil fields containing an estimated 65 billion barrels. The U.S. government gets a 35% interest in NABEP’s parent company, the right to purchase 20% of production at cost and first refusal on the remainder. The plan envisions as much as $100 billion in investment.
If it works, the benefits could be substantial. Venezuela’s devastated oil industry could be rebuilt. American refineries could gain access to enormous supplies of heavy crude. Russian and Chinese influence could diminish. And a reconstructed economy could help stabilize a country devastated by decades of socialist misrule.
There are already encouraging signs. Chevron has committed billions to expanding its Venezuelan operations, and other major energy companies are moving forward as well.
That is significant. But it does not make the unanswered questions disappear.
Start with something remarkably basic: How long does the deal last?
The White House describes NABEP’s concessions as lasting 100 years. Venezuela’s state oil company says the contract is for 25 years, with possible renewals. If the parties cannot agree publicly about the duration of the biggest oil deal in history, some caution seems appropriate.
Then there is the $100 billion. Venezuela has enormous reserves, but much of its petroleum infrastructure is decrepit. Rebuilding it will require staggering amounts of private capital, years of work and sufficient political and legal stability to persuade investors that their money is safe.
There are also questions about the Pentagon’s unusual 35% position in a private oil enterprise and whether future American and Venezuelan governments will honor an arrangement negotiated under extraordinary circumstances.
But the largest question may no longer be about oil. It is about democracy.
The administration has portrayed economic stabilization as a step toward Venezuela’s democratic transition. Yet Trump now says it is “too soon” for elections, while U.S.-backed transition discussions reportedly exclude the movement of opposition leader María Corina Machado.
That creates an uncomfortable conflict. Washington has secured extraordinarily favorable economic arrangements with the unelected government of Delcy Rodríguez. What happens if genuine democratic change threatens those arrangements?
Perhaps economic reconstruction will create the stability necessary for democracy. But incentives work both ways. The more economically invested Washington becomes in the existing government, the greater the temptation to value stability over political change.
None of this means the strategy will fail. Trump has plainly changed the strategic landscape. American companies are investing. Venezuelan production could rise substantially. Russian and Chinese influence could recede. If Venezuela becomes freer and more prosperous while American energy security improves, Trump will deserve considerable credit.
But success cannot be declared before the risks have been confronted. Sixty-five billion barrels underground are not oil in American refineries. Projected investment is not invested money. And a century-long promise is not a century of stability.
Trump may eventually be entitled to call this the biggest oil deal in history. For now, it remains one of the biggest bets.
