Trump administration officials are working on a deal to secure long-term access to a portion of Venezuela’s crude reserves, sources with knowledge of the negotiations said on Thursday, a move that could ultimately lower the cost of oil imports.
The agreement, which could be signed and made public soon, is expected to operate in a way that would let the U.S. government lock in a group of Venezuelan oilfields to be developed by American companies, the sources said, adding that the resulting supply would be guaranteed for the United States.
“This is real and being discussed at the highest levels of the U.S. and Venezuelan governments,” one of the sources said.
A separate source said a “lease” was in consideration as the legal model to make the deal work, with a further auction or tender to allocate each one of the fields among U.S. producers.
A list of 17 fields in negotiation seen by Reuters includes green fields in the vast Orinoco Belt combined with mature areas in Lake Maracaibo, some of which are currently operated by a small Chinese firm whose contract was signed during Maduro’s administration.
The White House referred questions to the U.S. Department of Energy. Venezuela’s oil ministry, state oil company PDVSA and the Energy Department did not immediately reply to requests for comment. Venezuelan oil minister Paula Henao could not be reached for comment.
Venezuela is considering leaving the OPEC oil production group as it strengthens ties with the U.S., Bloomberg reported late on Thursday. Venezuela, which joined the group as a founding member in 1960, has not met OPEC quotas for years as its state-run oil industry suffered from neglect and corruption. The U.S. has long been at odds with OPEC for its influence on oil prices.
Current hydrocarbons regulation in Venezuela, which has the world’s largest crude reserves, does not include acreage leases for oil areas, while the Constitution reserves the industry’s core activities to the state.
CHALLENGES
Recently reformed oil legislation allows oilfield operation through joint ventures and production-sharing contracts. For decades, the Venezuelan government has prevented foreign producers from booking the country’s oil reserves.
While full details of the prospective deal between Washington and Caracas have yet to emerge, it could raise constitutional questions and face legal challenges, according to experts.
Axios first reported on the talks on Thursday and said U.S. Energy Secretary Chris Wright is planning a trip to Caracas as soon as next week.
Since the U.S. captured and removed former President Nicolas Maduro from power in January, Washington has been trying to secure a stable flow of Venezuelan crude for U.S. refineries while promoting American investment into the OPEC country’s deteriorated energy industry, which currently produces some 1.25 million barrels per day of crude.
President Donald Trump’s administration is under pressure ahead of midterm elections scheduled later this year over rising gasoline prices, which could be eased through cheaper oil supplies and expanded output. The U.S. also has been looking for solutions to replenish its Strategic Petroleum Reserve, the oil stockpile, including the possibility of crude swaps with U.S. producers.
The SPR currently holds about 290 million barrels in underground salt caverns, about 41% of its total capacity. Funding shortages and ongoing maintenance at the reserve have limited the administration’s efforts to refill it after the U.S. tapped it following Russia’s invasion of Ukraine in 2022 and then again after the Iran war began in February.
(Reporting by Marianna Parraga in Houston and Jarrett Renshaw in Washington; Editing by Nathan Crooks and Lisa Shumaker)