US energy firms on Wednesday signed a raft of multi-billion-dollar deals with Venezuela, days after the South American country agreed to grant the United States control of a huge chunk of its vast oil reserves.
US Energy Secretary Chris Wright traveled to Caracas to oversee the signing of deals worth “tens of billions of dollars of investment,” seen as a quid pro quo for Washington winning majority control of 65 billion barrels of Venezuelan oil reserves.
Wright said the deals signed by Venezuela with US oil major Chevron, GE Vernova, a General Electric offshoot, and Italy’s ENI were “critical in starting this ball rolling of peace, opportunity, and prosperity” in Venezuela.
President Donald Trump has talked up the agreement on Venezuela’s oil reserves as the “biggest oil deal in world history.”
It comes as US Republicans brace for possible losses in November midterm elections due to spiraling fuel costs brought on by his war against Iran, and a broader national affordability crisis in housing, food, utilities and other basic needs.
But the deals have raised major questions about Venezuela’s sovereignty.
Critics in both the US and Venezuela accuse Trump of holding the country for ransom after ousting former president Nicolas Maduro in a raid and warning that Rodriguez could face a similar fate if she doesn’t fall into line with Washington’s demands.
The US was not “stealing Venezuelan oil,” Wright insisted to AFP and other media as he prepared to leave later Wednesday.
“All we’re doing is taking an idle, underground asset that isn’t doing anything for Venezuelan people and bringing the money, the technology to develop it,” he said.
Interim leader Delcy Rodriguez earlier denied she was surrendering her country’s riches, saying that cutting the US in on Venezuela’s oil wealth is necessary to secure investment in the oil sector.
More oil “translates into more jobs, higher wages, better public services, hospitals, schools and food,” she said.
Rodriguez has estimated that Venezuela will make $209 billion in profit from the deals over 25 years.
‘Large volumes’
The new contracts signed Wednesday will see US company Chevron and Italy’s ENI ramp up their operations in Venezuela while gaining greater stakes in the oil fields.
Chevron, the top private oil producer in Venezuela, has valued its deal to develop two additional oil fields in the Orinoco Belt at $7 billion and projects output will more than double in five years time.
ENI said it had gained exclusive rights to explore the giant Junin 5 oil field.
US energy company GE Vernova, an offshoot of General Electric, meanwhile, will help repair Venezuela’s battered electricity grid.
Wright told CNBC that Venezuela’s oil production would top 2 million barrels per day by the end of the decade, double the level in January when US forces seized Trump arch-foe Maduro.
That would still be far off Venezuela’s peak of over 3 million barrels per day in the late 1990s.
The pivotal role in the deal played by a fraud-accused Venezuelan businessman, Alejandro Betancourt, has come under scrutiny.
Betancourt has been linked to a corruption scandal at state oil company PDVSA and runs North American Blue Energy Partners (NABEP), Venezuela’s second-largest private oil company, in which the US government is taking a 35 percent stake under the deal.
Wright on Wednesday defended NABEP’s “highly successful track record of producing large volumes of oil in Venezuela,” adding: “That’s a business partner you can believe in.”
‘Not ready’ for elections
The agreement is a major about-face for the “Chavismo” movement of late socialist firebrand Hugo Chavez, Maduro’s mentor, who nationalised Venezuela’s oil fields two decades ago on an anti-imperialist platform.
It has amplified fears that the Trump administration is entrenching former Maduro loyalists, like Rodriguez — who have shown no readiness to hold democratic elections eight months after Maduro’s overthrow.
Trump on Wednesday rebuffed calls from a number of Republican lawmakers for quick polls in Venezuela.
“I just don’t think they’re ready yet. You know, it’s very new. We took them out of a dictatorship, and we’re getting along great with the government,” he said.
Rodriguez took a similar line, saying there would be “an electoral process” when “Venezuela is ready.”
Source: Khaleej Times