On August 28, Trump announced the conclusion of an oil deal with Venezuelan dictator Delcy Rodríguez, who succeeded the former dictator of the country, Nicolás Maduro, after he was secured by American forces. According to Rodríguez, the arrangement includes “the development of 17 fields with a proven potential of 65 billion barrels.”
The agreement lacks transparency, with much unknown about it. Secretary of State Marco Rubio and Defense Secretary Pete Hegseth were involved in the negotiations with Rodríguez. What is also known is that the United States will be able to partner with North American Blue Energy Partners (NABEP), which will have a century-long right to develop the oil fields. The Office of Strategic Capital, under the Department of Defense, “will hold a 35 percent equity stake in its corporate parent.” That corporate parent is likely Petróleos de Venezuela, S.A, Venezuela’s national oil company that has recently been transferring some of its operations to private companies.
The deal gives the United States 55% effective output of the new private company — including an ownership stake and rights to buy oil at cost. The company would be the second largest corporate holder of proven reserves after Saudi Aramco, according to the official.
AP
The Trump administration has elected to work with Alejandro Betancourt, who is under active criminal investigations in several countries. He has been accused in Venezuela and abroad of committing vast acts of corruption. He scammed Venezuelan taxpayers out of $2.9 billion on overpriced power plant modifications, and is being investigated for money laundering in Switzerland, as well as other nations.
This deal, which involves American state ownership of a private company, comes despite Trump’s apparent rejection of socialism, and support for free-market capitalism. Furthermore, the legality of the deal is questionable. As Rodríguez approved of it without the National Assembly, which has been degraded by years of dictatorship, this deal is illegal under Venezuelan law. Rodriguez’s status as head of state is illegitimate itself, as she was not elected. The State Department recognizes this fact, stating that the 2015 National Assembly was the last democratic entity in Venezuela. The deal may further erode Venezuela’s chances of embracing democracy, as the dictatorship becomes legitimized, its coffers filled, and an already extractive industry being solidified. Rodriguez herself utilized the oil industry to consolidate power within the Chavismo regime.
Author’s note
For more information on how this agreement can erode Venezuela’s democracy, I suggest reading Why Nations Fail by Daron Acemoglu and James Robinson. Venezuela’s now-strengthened oil industry will now suppress economic, and therefore political, pluralism.
