US-Venezuela Oil Pact for 65 Billion Barrels Faces Scrutiny Over Legality, Transparency

A massive, long-term oil deal that would place a significant portion of Venezuela's crude reserves under U.S. control is facing sharp questions from energy and legal experts. Critics are calling for transparency and raising concerns about the agreement's legality, financial terms, and potential impact on Venezuela's institutional stability.

Details of the Agreement

The pact, announced by U.S. President Donald Trump and confirmed by Venezuela’s interim President Delcy Rodriguez, would grant Washington control over 65 billion barrels of recoverable oil for at least 25 years. According to a Reuters report, this volume, sourced from 17 oilfields, surpasses the total U.S. proved oil reserves of 46 billion barrels.

Venezuela's government stated the deal is expected to secure $100 billion in investment and generate $209.3 billion in royalties and taxes. However, the negotiations were conducted in secret and did not involve a competitive bidding process. The U.S. has not yet disclosed which private companies would operate the fields on its behalf, though North American Blue Energy Partners (NABEP) has been reportedly involved in discussions.

Legal and Financial Scrutiny

Experts have quickly raised doubts about the deal's legal foundation and financial viability. Francisco Monaldi of Rice University’s Baker Institute described the projected tax revenues for Venezuela as "incredibly low" in a social media post, criticizing the lack of transparency in the country's oil policy, which has been under U.S. oversight since the capture of President Nicolas Maduro in January.

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Legal experts also warned of future challenges. "Despite being formally recognized by the U.S., the agreement can be brought to court in the future," said Juan Carlos Apitz, head of the law faculty at the Central University of Venezuela. Luisa Palacios, a senior research scholar at Columbia University, told Reuters the deal risks "further weakening the country’s already fragile institutional framework." The White House, U.S. Department of Energy, and Venezuela's state oil company PDVSA did not respond to requests for comment.

Market Context and Feasibility

The agreement is intended to provide the U.S. with a vast new source of crude, with President Trump noting the barrels could help replenish the U.S. Strategic Petroleum Reserve, which recently neared a 44-year low. The assets include a mix of producing and undeveloped fields in the Orinoco Belt and Lake Maracaibo, giving an operator a base of existing production with potential for future growth.

However, the technical projections are ambitious. An analysis by consultancy Gas Energy Latin America, cited by Reuters, found that the 65 billion barrel reserve figure is based on a 20% recovery factor that is considered technically feasible but has not yet been achieved in practice. Experts suggest that fully developing these reserves would likely take longer than the 25-year term of the agreement.