Trump's Venezuela Oil Deal Faces Skepticism Over Feasibility in Short Term

Industry insiders and Venezuelan experts consulted by Politico have expressed skepticism about the feasibility of the Trump administration's ambitious $100 billion plan to revive Venezuela's oil production. They caution that the agreement might not yield significant oil output in the near future—or possibly ever.

On August 28, Donald Trump unveiled what he described as the largest oil deal in history. The United States would secure a 35% stake in North American Blue Energy Partners (NABEP), a Barbados-based firm, to develop 17 Venezuelan fields with around 65 billion barrels of reserves.

In return, the U.S. would gain "preferential access" to 20% of the oil produced at cost price, purportedly for the Strategic Petroleum Reserve.

Industry Experts Voice Concerns

Criticism of the agreement comes from various quarters. A petroleum executive, speaking anonymously, encapsulated the industry's reaction with a rhetorical question: "What is this? It's too massive for a company lacking capabilities and credibility."

Evanan Romero, a former executive at Petróleos de Venezuela and consultant based in Houston, was more specific. He pointed out that the industry views the Orinoco Belt fields—comprising about half of the deposits in the deal—as "non-economical until the 22nd century." He stated, "There's no economic reason to develop that right now."

Financial Viability Under Scrutiny

Another anonymous executive familiar with the fields estimated that connecting those reserves to the market would require "at least a decade and hundreds of billions of dollars," labeling the plan as "aspirational" at best.

Questions about profitability also extend to the financial structure of the deal. Jim Reardon from the law firm Nelson Mullins warned that the clause reserving 20% of production for the Strategic Reserve amounts to a gross royalty that would deter any private investor: "Will there be any profit left at the end of the day? Who will take on the risk?"

Analysts further note that Venezuela's extra-heavy crude is technically incompatible with the type of oil the Strategic Reserve is designed to store, casting additional doubt on the plan's promises.

Controversial Leadership and Political Challenges

The involvement of NABEP's CEO, Alejandro Betancourt, adds another layer of controversy. The Washington Post reported that the U.S. intervened to allow him to travel for negotiations despite a Swiss arrest order amidst money laundering investigations in several countries.

Orlando Pérez, a professor at the University of North Texas at Dallas, describes Betancourt as a "bolichico"—a term for businessmen who gained wealth through ties to the Chavez regime—and doubts that a future Democratic administration would continue to protect him.

An anonymous U.S. official defended Betancourt's selection, stating that he is "someone who has been useful to the U.S. government in the past" and that the deal prevents the fields from falling into Russian and Chinese hands.

Venezuelan Opposition and Political Tensions

The Venezuelan opposition has also voiced concerns. Liliana Díaz, senior research fellow at the Atlantic Council Global Energy Center, summarized the political paradox of the agreement: "Criticism comes from opposing directions. Hardliners object to sovereignty over the resource. The opposition questions constitutional legitimacy. Something attacked from both flanks simultaneously tends not to last, regardless of its economics."

This tension is compounded by an unresolved contradiction between the parties: while the White House fact sheet mentions 100-year concessions, Venezuelan interim president Delcy Rodríguez stated that contracts would last 25 years, indicating that key details of the agreement remain fluid.

María Corina Machado reacted to the deal with "sadness and anger," questioning Rodríguez's constitutional authority to negotiate the country's resources and asserting that "Venezuela is worth much more than its oil."