The United States and Venezuela have finalized a 25-year bilateral oil agreement that establishes a production target of 1.5 million barrels per day (bpd) from 17 strategic oilfields, according to Venezuelan interim President Delcy Rodríguez. The deal, announced by President Donald Trump on Friday, grants the US majority control over 65 billion barrels of Venezuela’s proven oil reserves through a partnership with private business.
The agreement outlines a framework where Venezuela contributes its oil resources, workforce, and infrastructure, while the US provides capital and technology. Rodríguez stated the project aims to revive Venezuela’s energy sector, generate jobs, and increase government revenue. Trump described the arrangement as “the biggest oil deal in world history”, asserting it would double American oil reserves, lower gas prices, and secure long-term energy supply for the US.
Key terms of the deal
Under the agreement, a new private company will be established to develop the oilfields, with the US holding a 55% effective output stake through ownership and rights to purchase oil at cost. The company is projected to become the second-largest corporate holder of proven reserves globally, behind Saudi Aramco, according to a US official. Venezuela retains ownership of its natural resources, Rodríguez emphasized, while the deal includes provisions for $100 billion in investment and $209 billion in projected tax revenue for Caracas, based on a benchmark oil price of $65 per barrel.
Production and timeline
The initial target is 1.5 million bpd, though Rodríguez noted this is a starting point. The broader plan includes the development of eight additional greenfield oil blocks as part of a long-term expansion strategy. Current Venezuelan production stands at 1.25 million bpd, significantly below its potential due to years of underinvestment, mismanagement, and sanctions.
Funding and operational details
While Trump claimed the deal costs no American taxpayer funds, key operational details remain undisclosed. No public text of the agreement has been released, and questions persist about timelines for drilling, funding sources, and specific US corporate involvement. A US official confirmed that oil purchases under the deal will contribute to the US strategic petroleum reserves and military stockpiles.
Reactions and implications
Rodríguez framed the agreement as a historic step toward economic recovery, highlighting its potential to modernize Venezuela’s energy infrastructure. Trump’s announcement followed the January capture of former President Nicolás Maduro on federal drug trafficking charges, marking a shift in US-Venezuela relations. However, critics and analysts note that sanctions relief, debt restructuring, and political stability remain critical factors for the deal’s success.
The agreement’s 100-year lease term for the new company has drawn scrutiny, raising questions about long-term sovereignty and environmental oversight. Environmental groups have expressed concerns over potential ecological risks associated with expanded oil extraction in Venezuela’s ecologically sensitive regions.
Next steps
Both governments have not provided a public timeline for implementation, and further negotiations are expected to clarify operational and financial mechanisms. The deal’s success hinges on stabilizing Venezuela’s political climate, securing private investment, and ensuring equitable benefits for both nations.