U.S.-led venture gets 25-year rights to 17 Venezuelan oil fields and access to 65 billion barrels

A new company, majority-owned by the U.S. government, has won 25-year rights to develop 17 oil fields in Venezuela. The fields hold 65 billion barrels of proven crude — about 21% of the roughly 303 billion barrels Venezuela held as of 2023, the largest proven reserve base of any country. The oil may eventually supply Gulf Coast refineries, though Venezuela's degraded oil infrastructure makes near-term relief at the pump uncertain. Ted Cruz (Sen-R Texas) said on Sunday, Aug. 30 that the deal could benefit jobs and gasoline prices "over the long term," while arguing that Venezuela should hold free and fair elections no later than the middle of 2027.

What this deal covers, and what it leaves out:

• Caracas projects $209.3 billion in royalties and taxes over the life of the deal, using a $65-per-barrel reference price.
• That works out to roughly $19 of every barrel for the Venezuelan state, or about 29% of that $65 price. It is the government's cut of the money coming in, not a share of the profits, and no profit split has been disclosed.
• The remaining $46 has to cover drilling, operating costs and the venture's return; how that divides between Washington and the private operator has not been published.
• The U.S. government is the majority owner of the new company, and that company, not the state oil firm PDVSA, holds the rights to develop the fields. Venezuela keeps ownership of the oil underground.
• No company has publicly committed to the advertised private investment, and neither government has named the investors.