Venezuela’s Congress approves oil deal granting U.S. company rights to 17 fields

Venezuela’s Congress has approved a sweeping oil agreement with the United States that gives a U.S.-linked company long-term rights to 17 oil fields and broadens Washington’s influence over the country’s energy industry.

The agreement, approved on July 1 by a legislature dominated by the governing party, gives North American Blue Energy Partners, known as NABEP, 100-year leases for fields holding an estimated 65 billion barrels of oil. That figure exceeds the 46 billion barrels in proven reserves held by the United States.

In return, NABEP is expected to pay the Venezuelan government about $200 billion in production royalties and taxes during the first 25 years after the contracts take effect. The company is set to control 17 oil projects in Venezuela, including 14 newly acquired concessions. Five of those projects had been operated by Chinese companies, while one had been held by a Russian company.

The United States government has also reached a separate agreement with NABEP. The U.S. Defense Department will acquire a 35% stake in the company, while the State Department will receive 20% of its oil at production cost for large-scale supply to U.S. refineries. The White House said the State Department would also receive first purchasing rights over the remaining 80% of production.

The deal is expected to weaken the role China and Russia have long played in Venezuela’s energy sector. China’s Foreign Ministry objected, saying, “China’s legitimate rights and interests in Venezuela must be protected.” U.S. Energy Secretary Chris Wright is due to visit Caracas on July 2 to finalize the agreement and sign contracts with private entities. Representatives of Chevron are expected to accompany him and announce expansion plans.

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China’s legitimate rights and interests in Venezuela must be protected.