Trump promises an oil bonanza in Venezuela, but critics question who will benefit

In typically bombastic fashion, Donald Trump described his August deal with Venezuela’s interim government as “the biggest oil deal in world history.”

It effectively hands control of 17 oil fields to US interests. Explaining the deal to her people, acting president Delcy Rodríguez emphasised the need for investment which “translates into development for Venezuela”.

The areas in question reportedly hold 65 billion barrels of oil, approximately 20% of Venezuela’s total reserves. Operating rights will pass to the control of North American Blue Energy Partners (NABEP), a company owned by Venezuelan Alejandro Betancourt, but a third owned by the US Office of Strategic Capital. The US also gets preferential access to 20% of production at cost price.

Rodríguez claims the deal will net the country more than USD 200 billion. But some estimates suggest Venezuela may have left billions on the table by not freely auctioning off the rights. Various critics have also pointed to a lack of transparency regarding the details, the potential loss of tax revenue, and hidden environmental costs resulting from the lack of a plan to mitigate the industry’s impacts.

The deal

The path was laid for this deal when the US captured former president Nicolás Maduro in January. Less than three weeks later, a new Hydrocarbons Law was approved by Venezuela’s National Assembly. This overturned Chávez-era regulations stipulating state control over oil fields and allowed for greater private commercialisation.

NAPEB will invest USD 100 billion as part of the agreement and says it will increase current production from 200,000 barrels a day to 500,000 by the end of 2028.

According to El Nacional, the list of areas involved includes eight unexplored or undeveloped oil fields, known as “greenfields”, in the Orinoco Oil Belt, an area of 55,000 sq km north of the Orinoco River, in central and eastern Venezuela, believed to hold 300 billion of barrels of extra-heavy crude. It also includes mature fields, “brownfields”, in the Lake Maracaibo Basin.

The belt is an important reservoir of biodiversity, home to reptiles, migratory birds, and mammals, including threatened species such as Orinoco crocodile and the Orinoco river dolphin.

An Orinoco crocodile basking on a river bank in Muñoz, Apure, southwest Venezuela (Image: Christophe Courteau / Nature Picture Library / Alamy)

One challenge the initiative will face is that, since the 1920s the Orinoco Belt’s extra-heavy crude has posed extraction challenges due to its viscosity and density, prompting the development of new techniques to exploit it. Since the deal was announced, NABEP has announced the arrival of 20 workover drills and up to 60 new rigs in order to expand or begin operations in areas in the Orinoco Belt.

Another is the lifespan of the fields. Carlos Mendoza Potellá, an oil economist and former advisor to the Central Bank of Venezuela, told Dialogue Earth that the mature fields still have “considerable reserves, but a short productive lifespan by industry standards”. They have already been exploited for 60 to 80 years, so according to Mendoza, could stop producing profitably before the expiration of the 25-year concession.

Economist Asdrúbal Oliveros also points out that material conditions in Venezuela could prove a stumbling block. The Venezuela International Oil and Gas Summit held in Caracas between 28 and 30 September was well attended by oil executives from around the world. This, Oliveros says, “confirmed the huge appetite that exists for Venezuela, but also the limitations. We have oil, but we need electricity, roads, ports, storage, pipelines, upgraders, oil services, financing and human capital”.

Assessments by Siemens and General Electric estimate that between USD 15 billion and USD 40 billion must be invested just to restore the electrical grid.

For the oil expert, Paulino Betancourt, investments will not materialise “without legal guarantees to extract it and repatriate dividends without contractual surprises. There is preliminary interest, but major capital and large firms will enter when legal certainty outweighs political risk.”

How much would Venezuela gain and lose?

On 30 September, acting President Rodríguez stated that Venezuela will receive minimum royalties of 16% and taxes of 34%. “For every barrel produced and sold, around USD 19 go directly to our country.” She claimed that in total, this would amount to USD 209 billion over 25 years.

However, Oliveros points out, that equates to USD 8 billion dollars a year, which equals 8% of Venezuela’s 2025 GDP. He also cast doubt on the ambitious timeline. “I wouldn’t expect an overnight oil miracle,” he says. “If the rules are upheld, the announced capital actually flows in, infrastructure improves, and the political and institutional process gains credibility, in three to five years we could be talking about a very different Venezuelan economy.” His timeframe, however, would be “several years” rather than months.

According to former National Assembly member and oil economist José Guerra, Venezuela sacrificed USD 6.2 billion in revenue by handing over the areas without public auctions and agreeing to deliver 20% of oil at cost price.

Oliveros says the impact of the deal can only be evaluated once the true impact on development, jobs and the economy materialises, alongside the implementation of policies for transparency, savings, and investment. “It is not enough to produce barrels,” he says. “What matters is how they are turned into well-being for Venezuelans.”

Delayed transition

The oil deal also highlights the lack of progress on Venezuela’s energy transition, which has stalled before it really got started. PDVSA, the state-owned energy company, abandoned several wind farms before they were completed, amid budget issues, while a solar panel factory using Chinese technology is barely operational. Maintenance has also been halted on a national network of small solar installations. Current energy plans focus on developing infrastructure to extract natural gas and recovering and expanding hydropower, the country’s main source of electricity.

Juan Carlos Sánchez, co-winner of the 2007 Nobel Peace Prize as a member of the Intergovernmental Panel on Climate Change, has advised the government to take a different approach. In Venezuela’s Energy Roadmap 2026-2050, a document he drew up independently to help inform decision making, he recommends using oil revenues to finance improving electricity infrastructure, renewable energy development, and economic diversification. The roadmap calls for stronger institutions and an energy transition fund. It stresses the lack of government targets on energy transition and climate change.

Meanwhile, the government disclosed last year that in 1990-2022 the electricity mix was dominated by hydropower (79.73%), with about 20% coming from fossil-fuel-fired thermal power plants. A wind farm and a solar farm were added to the grid in 2024, it added. Using Venezuela’s 2021 Nationally Determined Contribution inventory, Efecto Cocuyo has estimated that solar and wind power account for only 0.27% of the energy consumed in Venezuela.

The neglect of the nation’s oil infrastructure has also led to frequent leaks – particularly in the hundreds of kilometres of underwater pipelines in Lake Maracaibo.

The environmental NGO Clima 21 and the NGO Provea issued a joint statement in September urging the government to establish environmental safeguards and human rights guarantees in light of the new oil agreement. They called for transparency, consultation with Indigenous communities and for existing spills to be dealt with.

Facing China and Russia

The deal has also thrown into question oil interests long held by companies from China and Russia.

In January 2026, following Maduro’s capture, the Russian state oil company Roszarubezhneft stated that all its assets in Venezuela “are the property of the Russian State, acquired by the Russian side under market conditions, in full compliance with the laws of the Bolivarian Republic of Venezuela, international law and intergovernmental agreements”.

In September, Guo Jiakun, spokesman for the Chinese Ministry of Foreign Affairs, insisted that cooperation between China and Venezuela is “protected by international law and the laws of both countries” and that its legitimate interests “must be guaranteed”.

Chinese leader Xi Jinping with Venezuela’s former president Nicolás Maduro in Caracas in 2014. After the new deal with the US, Venezuela’s minister of hydrocarbons said that joint ventures with China and Russia remain valid (Image: Wang Ye / Xinhua / Alamy)

US Energy Secretary Chris Wright declared days after the new deal that China would have no rights to the new oil revenue to collect Venezuela’s outstanding debt. In a February visit to Venezuela he had said the influence of China, Russia and Iran “will be considerably reduced”.

Venezuela’s minister of hydrocarbons, Paula Henao has said that joint ventures with China and Russia remain valid. But most of the contracts signed by Chinese companies since 2024 were signed under the Anti-Blockade Law. This legislation, enacted to circumvent US sanctions, offered less legal certainty but greater profits than joint ventures.

Five of the 17 oil fields involved in the deal have been transferred from Chinese companies, according to Reuters, citing US officials. Among them is the private firm China Concord Resources, whichLuis Díaz Salazar, a former member in the National Assembly, told Dialogue Earth the company is now seeking compensation.

China can “play a waiting game”, Salazar says, waiting for better geopolitical conditions, confident in its advantages.

Oil expert Paulino Betancourt predicts an “exercise in cold pragmatism and strategic patience” from Chinese interests. “It will apply the diplomacy of the patient debt-collector: they know that administrations pass, but debts and subsoil resources remain,” he tells Dialogue Earth.