US officials on Tuesday defended a contentious agreement granting the US control over a significant portion of Venezuela's oil reserves, arguing the deal would help stabilize and rebuild democracy in the crisis-hit South American nation while securing strategic crude supplies for Washington.
Last week, President Donald Trump announced a "groundbreaking" deal giving the US "majority" control over 65bn barrels—roughly one-fifth—of Venezuela's oil reserves. The agreement, forged after months of secret talks, has sparked outrage among Venezuela's opposition, which remains frustrated that democracy has not returned eight months after Maduro's removal by US special forces.
Deal aims to rebuild Venezuela's economy
During a conference call with journalists on Tuesday, a US official said the pact would create a stable economic platform to restore Venezuelan democracy after nearly three decades of autocratic rule under former president Nicolás Maduro and his predecessor Hugo Chávez.
"They are inheriting a government that is generating revenue that can be used to rebuild that country," the official said.
According to a White House factsheet released on Monday, the agreement grants US-backed North American Blue Energy Partners (Nabep) 100-year rights over 17 oil fields in what it touted as "the biggest oil deal in world history." Nabep is owned by Venezuelan businessman Alejandro Betancourt, a controversial figure.
Officials tout rapid production increase
The US official said allowing Nabep to take over the oil fields would provide capital to "ramp up production rapidly," generating royalty revenue for the government—initially the interim government, but ultimately for a democratically elected one.
"We can hand over a more stable Venezuela. But no matter what, a democratically elected Venezuela is still going to face challenges after 20 somewhat years of the disaster of Chavismo and Maduro after the country was dismantled from the inside out, and it needs to be rebuilt," the official said. "That's going to take time. You don't reverse 20 years of corruption, 20 years of kleptocracy, 20 years of no democracy, no freedom."
The justification for taking over oil fields previously controlled by Chinese and Russian companies came as Trump met oil refinery executives to discuss converting crude into petrol and lowering pump prices for motorists.
Oil deal tied to Iran war fallout
Energy Secretary Chris Wright was due to fly to Caracas on Tuesday to follow up on the deal, which Trump has hailed as "a historic transaction" to fill US strategic oil reserves.
The oil deal has gained urgency following Trump's decision to go to war with Iran in February, which caused fuel prices to soar after Iranian forces retaliated by closing the Strait of Hormuz, a passageway for 20% of the world's oil supplies. Petrol prices now average about $4.10 a gallon, compared with under $3 before the war started.
Increased petrol prices have affected the broader economy and led to significant drops in Trump's popularity, with polls showing a majority of voters disapproving of his handling of the war and the economy.
The agreement was backed by Venezuela's national assembly—dominated by the ruling United Socialist party—on Tuesday, after the country's president, Delcy Rodriguez, defended it at the weekend. "The benefits are endless," Rodriguez claimed.
Opposition critics have complained that the Trump administration has made no attempt to promote a transition to democracy or stage new elections since Maduro was detained by US forces and taken to New York to face criminal charges after a raid on his Caracas residence in January. Instead, the White House has chosen to work with Rodriguez, Maduro's former vice-president, despite her past hostility to the US and roles in anti-opposition crackdowns.
The US official said talks between the Venezuelan government and the opposition were set to resume later this month. "The last thing we want to see is a new democratic elected government inherit a country in crisis," he said.
