US and Venezuela Negotiate Massive Oil Output Deal Amid Uncertainty

Caracas and Washington are negotiating a massive oil output deal that would provide the U.S. with up to 1.5 million barrels of exportable Venezuelan crude per day, according to authorities.

The agreement requires a complicated three-layer structure to develop at least a portion of the 64 billion barrels of proved reserves contained in 17 oilfields included in the deal.

Government-to-government negotiations have resulted in a pact that aims to secure U.S. access to the oilfields through a partnership with private business, grant most production will be shipped to the U.S., and build a long-term relationship with the fields' operator.

The exact terms of the agreement remain unclear as Venezuela's main oil law was recently reformed to remove the National Assembly's mandatory oversight over energy contracts marked as in the national interest.

North American Blue Energy Partners (NABEP) has been chosen by Washington to partner for the deal, and a new joint venture could absorb and expand NABEP's existing projects, providing a base of exportable oil output.