US energy Pact gives Washington major control over Venezuela’s oil reserves

The White House has disclosed details of a major energy agreement under which Washington is set to gain significant control

The White House has disclosed details of a major energy agreement under which Washington is set to gain significant control over Venezuela’s vast proven oil reserves, estimated at around 65 billion barrels.

Under the agreement, North American Blue Energy Partners (NABEP) has provided the Pentagon’s Office of Strategic Capital with a 35 per cent ownership stake in its parent company without any cost to US taxpayers, according to the White House. The arrangement also gives the US State Department the option to purchase up to 20 per cent of the oil produced under the agreement at cost.

The duration of the deal has, however, emerged as a point of difference between Washington and Caracas. Venezuelan interim President Delcy Rodriguez had earlier described the arrangement as a 25-year agreement. The White House, meanwhile, said NABEP had obtained concessions lasting 100 years for 17 designated oil fields.

Rodriguez took control of the government in January following a US military operation that resulted in the capture of President Nicolas Maduro.

The agreement is also expected to provide substantial financial support to Venezuela’s interim administration. NABEP is projected to contribute approximately $200 billion in royalties and taxes during the first 25 years of the arrangement.

According to the White House, these funds are intended to support Venezuela’s reconstruction, economic recovery and social development. The agreement comes after years of declining investment and what Washington described as mismanagement in the country’s oil sector.

In addition to fiscal contributions, the deal could bring as much as $100 billion in fresh infrastructure investment. The funding is expected to help modernise Venezuela’s oil industry and increase production capacity after years of limited investment.

The agreement places Venezuela’s oil operations under a framework governed by US law, with disputes subject to the jurisdiction of American courts. It also establishes extensive US oversight of NABEP’s corporate structure.

A majority of the company’s board members will be required to hold US citizenship. Washington will additionally retain veto authority over the appointment of board members, giving the United States considerable influence over the company’s future decisions.

Oil produced through the agreement is expected to be processed at US refineries, potentially supporting thousands of jobs within the American energy sector. Part of the supply is also intended to replenish the US Strategic Petroleum Reserve, the country’s emergency stockpile of crude oil maintained in Texas and Louisiana.

The White House has portrayed the agreement as part of a broader geopolitical shift in the Western Hemisphere. Officials described it as a revival of the Monroe Doctrine, a 19th-century US policy aimed at limiting foreign powers’ influence in the Americas.

The agreement specifically focuses on oil fields that were previously operated by Russian and Chinese companies. Washington has said the arrangement is designed to remove what it considers “malign influence” from Venezuela and strengthen US strategic control over the region’s energy resources.

The development comes at a time of heightened uncertainty in global energy markets. The Strait of Hormuz, one of the world’s most important oil transportation routes, remains affected by the ongoing US-Israeli conflict with Iran, which began on February 28.

The Venezuela agreement therefore carries implications beyond the country’s oil industry, potentially reshaping energy flows, US economic interests and the broader geopolitical balance in the Western Hemisphere.