Washington, Sep 1 (IANS) The United States has secured a 35 per cent equity stake in a Venezuelan oil venture without investing federal funds, gaining access to vast proven reserves under an agreement aimed at curbing Chinese and Russian influence in the Western Hemisphere, a senior US official said.
The arrangement covers fields containing about 65 billion barrels of proven reserves. It also gives Washington access to 20 per cent of production at cost and the right of first refusal over the remaining 80 per cent, the official told reporters.
“The United States is not investing dollars. It’s investing, it’s backing behind this deal in exchange for 35 per cent of the equity,” the official said.
The equity holding has been structured through the Office of Strategic Capital at the Department of War. Another US official said the transaction was consistent with statutory powers granted to the office when it was created during the Biden administration.
The administration views the agreement as part of a broader geopolitical strategy to secure a stable energy supply and draw Venezuela away from Moscow and Beijing.
“It was an opportunity, a geopolitical opportunity to secure fields that primarily had largely been under the influence of Chinese and Russian companies and allow them to instead be aligned with the United States and to our long-term interest,” the senior official said.
The official said the United States would have access to 20 per cent of the oil produced at the cost of production. A future administration could use that supply to replenish strategic reserves or generate federal revenue.
Washington does not expect routinely to exercise its right of first refusal over the remaining production. But the provision could serve as “a long-term insurance policy” during an energy emergency, the official said.
The deal is also expected to attract private capital needed to restore Venezuela’s damaged production capacity. The administration estimates that it could lead to at least USD 100 billion in private investment.
The agreement provides for a royalty ceiling of up to 30 per cent for Venezuela and a hydrocarbon tax of up to 15 per cent, according to the official.
US Energy Secretary Wright is expected to lead a delegation to Venezuela, where Chevron will announce an expansion of its existing operations. The official said several small and medium-sized deals had also been announced in recent days, with more expected.
Washington described Venezuela’s oil recovery and its proposed democratic transition as parallel efforts. A third round of political talks is expected in September, but the official declined to provide a timetable for elections.
“We want to see it happen as soon as possible,” the official said. “But we also want to make sure the conditions are right because our interest here is not just having an election. It’s having an election that leads to an enduring republic.”
The administration argues that rebuilding the oil industry before elections would help an eventual democratic government inherit a functioning revenue base rather than an economy in free fall.
Venezuela possesses the world’s largest proven crude oil reserves, but years of underinvestment, corruption, sanctions and operational decline sharply reduced output from the levels reached before the presidency of Hugo Chavez. The state-owned oil company, Petroleos de Venezuela, has long been the central source of government revenue.
China and Russia developed extensive energy and financial ties with Venezuela during the Chavez and Nicolas Maduro governments. China provided oil-backed loans, while Russian companies participated in Venezuelan energy projects and Moscow extended political and economic support to Caracas.
–IANS
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