Venezuela-US Oil Deal Raises Legality Concerns

The unprecedented deal between Venezuela and the US involves structuring a massive oil output agreement that requires a three-layer structure. The pact, announced last week, aims to develop at least a portion of the 64 billion barrels of proved reserves contained in the 17 oilfields included in the deal.

According to authorities, if completed as negotiated, the pact will immediately provide the US with a base volume of exportable Venezuelan crude from mature fields already in operation. Total production is set to grow to up to 1.5 million barrels per day (bpd).

The first layer is the government-to-government pact between Caracas and Washington. The terms were negotiated for months to reach several goals, including securing US access to the oilfields through a partnership with private business and granting that most production will be shipped to the US due to energy security.

However, many doubts over the deal's legality and operational feasibility remain unaddressed. Lawyers and experts have warned that the pact might eventually end up in court, citing its long duration, lack of approval by other institutions in Venezuela and the US, and absence of a competitive process to choose partners.