American company NABEP is set to gain control over 17 oil fields in Venezuela. Among these fields are five previously developed by China and one by Russia. The terms of the agreement involve the U.S.
government receiving a 35 percent stake in NABEP, alongside a priority right to purchase the oil produced. Previously, Rosneft was the primary Russian entity operating in Venezuela, transferring its assets to the state-owned Russian company Roszarubezhneft in 2020. According to Reuters, The Wall Street Journal characterizes the deal as legally complex and unusual.
Furthermore, the Pentagon is slated to participate as an investor, though questions remain regarding the legality of the U.S. government owning shares in a foreign corporation. Operational constraints also exist; increasing oil production rapidly is challenging due to the dilapidated state of Venezuela’s existing oil infrastructure, which will require substantial investments and years for restoration.
Additionally, the agreement was signed with Venezuelan authorities whose legitimacy is contested. There is a noted risk that a change in the government could lead to attempts to renegotiate the terms of the agreement.
Topics: #venezuela #oil #russia
