US-Venezuela Oil Deal Risks Derailing Recovery Plans

The US government has proposed a plan to acquire a 35% equity stake in Venezuelan oil firm North American Blue Energy Partners (NABEP) and grant it a 100-year lease on 17 oilfields containing an estimated 65 billion barrels of reserves. In exchange, the US would receive a guaranteed 20% share of production at cost.

The deal has been met with fierce criticism from Venezuela's opposition and some Democrats in the US, who see it as akin to modern-day colonialism. Critics argue that the plan will stifle competition, distort markets, and deter foreign investment in Venezuela's oil industry.

Venezuela's oil production collapsed after years of underinvestment, operational mismanagement, and corruption following nationalization in 2007. Output has fallen from around 3.5 million barrels per day (bpd) in the 1990s to about 1 million bpd today. The country aims to recover to 1.5 million bpd within two years and reach 2.3 million bpd by 2035, according to Rystad Energy.