Trump's Venezuela Oil Deal Faces Criticism from Industry Specialists

The Trump administration's $100 billion plan to reactivate Venezuelan oil production has been met with skepticism from experts and industry specialists. The deal, announced on August 28, involves the US acquiring a 35% stake in North American Blue Energy Partners (NABEP) to exploit 17 Venezuelan fields with approximately 65 billion barrels of reserves.

Under the agreement, Washington would have 'preferential access' to 20% of the oil produced at cost price, intended for the Strategic Petroleum Reserve. However, critics argue that the deal may not generate significant oil in the short term, or perhaps never.

An anonymous oil executive questioned the viability of the plan, stating 'What is this? It’s too big for a company lacking capabilities and credibility.' Evanan Romero, former executive of Petróleos de Venezuela and consultant in Houston, added that the industry considers the Orinoco Belt fields, where approximately half of the reserves are located, 'not economical until the 22nd century.'

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 at the end of the day? Who will assume the risk?' Analysts also pointed out that Venezuelan extra-heavy crude is technically incompatible with the type of oil that the Strategic Reserve is designed to store.

The choice of CEO Alejandro Betancourt has been criticized, with Professor Orlando Pérez from the University of North Texas in Dallas describing him as a 'bolichico', an entrepreneur who became rich through connections with the chavismo. An anonymous U.S. official defended the choice, arguing that Betancourt is 'a person who, in the past, has been helpful to the U.S. government.'

The Venezuelan opposition has also expressed concerns, with Liliana Díaz, senior researcher at the Atlantic Council Global Energy Center, stating that the agreement is attacked from both sides, hardliners objecting to sovereignty over the resource and the opposition challenging its constitutional legitimacy.