WASHINGTON (AP) — Aside from a post by President Donald Trump on social media, the White House has said little about what he calls “THE LARGEST OIL DEAL IN WORLD HISTORY” in Venezuela. Trump said the deal announced Friday night would give the United States a stake in Venezuela’s vast oil reserves, a step toward his goal of extracting energy from the country after U.S. forces captured then-President Nicolas Maduro in a midnight raid in January and took him to New York to face federal drug trafficking charges. Venezuela’s interim president, Delcy Rodríguez, described the agreement as a step toward economic recovery that will modernize the country’s oil industry. In a televised address to the nation Saturday night, Rodríguez insisted that Venezuela’s sovereignty is secure and said he wants the country to become a global energy power. Earlier on Saturday, he said oil reserves would “stop being a cold, inert statistic and instead become concrete solutions. Housing is one of them.” No text of any agreement has been published. A look at what is known and what is unknown: What are the terms? The US government and an unnamed private operator in Venezuela formed a new company that was given the rights to untapped oil fields for 100 years. “However, investors will remain cautious even if the terms of the deal, once published, pass legal muster. A future president could withdraw, and Caracas has twice expelled foreign investors,” McNally said. A statement from Rodríguez said the agreement involves the development of 17 fields with a proven potential of 65 billion barrels. He said the deal could attract $100 billion in investment to Venezuela’s oil industry and generate more than $209 billion in taxes for Caracas. Trump said the deal was negotiated by Secretary of State Marco Rubio, Secretary of Defense Pete Hegseth and Rodriguez. Sign up for the Ground Game newsletter: your guide to the biggest stories in American politics, policy and elections. The agreement gives the United States 55% of the new private company’s effective production, including an ownership stake and rights to buy oil at cost. U.S. oil purchases will go toward U.S. strategic oil reserves along with the military, according to a U.S. official who was not authorized to discuss the matter publicly and spoke on condition of anonymity. The company would be the second largest corporation holding proven reserves after Saudi Aramco, according to the official. Will gasoline prices go down? Probably not anytime soon. Trump says the deal will help lower gas prices for Americans. That’s a major goal for the Republican president as the Iran war slows shipping of Persian Gulf oil and keeps prices elevated months before the November U.S. election. But experts have repeatedly warned that Venezuela’s crumbling oil infrastructure will take years and billions of dollars to repair. A substantial increase in production is not expected to occur quickly. The deal could be “helpful in the long run, but it will do nothing to change the price of gasoline at the pump over the Labor Day weekend,” said Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Laboratory at New York University. Neither side made it clear who would pay for the infrastructure investments and at what cost. The average price of gasoline in the United States stood at about $4.08 a gallon on Saturday, according to AAA. The average price was $3.20 at the same time last year. Kevin Book, managing director of ClearView Energy Partners, said the oil industry is waiting for clarity on the details of the deal. Venezuela has room to increase its oil production, he said; in the past it produced more than 2.5 million barrels per day above current levels, but investments of this scale do not happen quickly. “It’s going to take time, many years, to deploy that much capital and produce the kind of incremental results that history suggests are possible,” Book said. How will Venezuelans react? Some in Venezuela considered it a betrayal of what its government has repeatedly stated for decades: Venezuelan resources are for Venezuela, and leaders would not allow the U.S. government access to those resources. At a market in eastern Caracas on Saturday, Douglas Borjas said he was upset by the announcement. “I think they are doing it to hold on to power,” he said of Venezuela’s leaders. “It’s like, ‘I’m giving you a lot of oil as long as you leave me alone here in power.'” And he added: “The Venezuelan people deserve better. Venezuela has resources that can be exploited, but for the benefit of the people, not for the benefit of the corrupt elite.” Ricardo Hausmann, a Harvard University professor and former Venezuelan planning minister, called it a “shameful agreement.” “Venezuelans will not respect this illegitimate agreement and no major American oil company will take it seriously because they know it will not last,” Hausmann said on social media, adding that Rodríguez “has no legitimacy or constitutional power to commit Venezuela to such an agreement.” In his national address, Rodríguez rejected some of the early criticism. “One thing must be absolutely clear: Venezuela retains ownership and sovereignty over its resources,” Rodríguez said. He said that the objective is to reach other agreements with transnational private companies such as Chevron, Repsol and Shell. And he added: “We want to be an energy power, an important oil producer, an important gas exporter and an important national developer of petrochemicals.” What is the reaction on Capitol Hill? It’s unclear whether Congress will play a role in the deal, but lawmakers from both parties were quick to weigh in. Trump’s allies called it a victory. Sen. Bernie Moreno, R-Ohio, said it was a historic agreement that helps both countries. “If it were up to the DC Democrats, Maduro would still be in power, Venezuelan oil would go to China at half price and the people of Venezuela would be being robbed by a corrupt regime,” Moreno wrote on social media. He was condemned by Democrats who said Maduro’s capture was a means to this end. Sen. Tim Kaine, D-Va., said Trump was always after Venezuela’s oil, calling it “corruption on an epic scale.” “Will prices go down for Americans? Who knows, but probably not as much as Trump has forced them up during his idiotic war with Iran,” Kaine said on social media. Chris Van Hollen, D-Md., said Trump “put our service members at risk to get Venezuelan oil for his billionaire friends.” What questions remain? Many important details remain unclear, including who will cover the necessary investments, the identity of the private operator and how the US stake in the company breaks down. The United States will get 55% of the company’s effective production, but it was unclear how much of that comes from an ownership stake and how much comes from the right to buy oil at cost. It is unclear how the industry will react. Persuading big American oil companies to return to the region could prove challenging given political uncertainty and damaged infrastructure. Chevron, the only U.S. oil company actively producing in Venezuela, declined to comment. Aside from Trump’s announcement, Chevron had already been in talks to expand investment in the country. Exxon Mobil also declined to comment. David Oxley, chief climate and commodities economist at Capital Economics, said that, at first glance, the deal could double U.S. oil reserves and reduce dependence on crude oil from Canada and Mexico. But Oxley, in a commentary, warned that there are logistical obstacles and said the value of Venezuela’s reserves may have been exaggerated during the government of former President Hugo Chávez. Even with legal and security guarantees, it is not clear that American oil companies “would be willing to invest,” he wrote, noting that “there may simply be more attractive business opportunities on offer elsewhere.” ___Arráez reported from Caracas, Venezuela. Associated Press writer Moriah Balingit and AP Economics writer Paul Wiseman in Washington contributed to this report.
