U.S.-Venezuela Oil Deal Includes 100-Year Concessions For Washington-Backed Company

The Venezuelan government led by interim President Delcy Rodriguez approved a deal granting U.S.-backed North American Blue Energy Partners (NABEP) 100-year concessions for 17 oil fields.

The decision follows the Trump administration's deal with the South American country to exploit is vast oil reserves. CNBC noted that NABEP is the second-largest private oil producer in Venezuela, and has given the U.S. Department of War's Office of Strategic Capital an equity stake of 35% in its corporate parent. That will represent "hundreds of billions in value and dividends for the United States," the White House said.

"NABEP has granted the U.S. Department of State the right to purchase, at production cost, a guaranteed 20% of the off-take from all current and future fields NABEP will operate," the White House added. It noted that NABEP has also "granted the U.S. Department of State the right of first refusal to purchase the remaining 80% of its production, providing a guaranteed source of energy in our hemisphere in emergency situations."

The White House went on to say that NABEP has "developed an ambitious plan to rapidly scale production by investing up to $100 billion in new oil infrastructure in Venezuela" and will pay "an expected $200 billion in royalty and tax payments over the first 25 years, representing critical revenue and fiscal support for current and future Venezuelan governments to fund reconstruction and social development."

President Donald Trump has said that the deal will allow the U.S. to replenish its Strategic Petroleum Reserve, which has been largely depleted as a result of the war in Iran.

In a social media post, Trump said that the "'topping out' process will begin very shortly, and is a Gift from Venezuela to the People of the United States."

Delcy Rodriguez has defended the deal, saying the country will keep ownership and sovereignty over the reserves. "The benefits are endless," she said during the weekend.

"As everyone knows, our country has the biggest oil reserves in the world. But having resources underground isn't enough. We need investment, technology, infrastructure [and] production capacity to convert this wealth into wellbeing for our people," she added in a televised address.

"It's no use having our oil reserves underground, only to appear in statistics or bookkeeping ... and for us not to be able to convert and translate them into development for Venezuela."