Understanding the Implications of the U.S.-Venezuela Oil Deal

On August 31, 2026, the White House published a fact sheet on the “Historic Oil Agreement to Secure American Energy Dominance and Drive Venezuela’s Economic Recovery.”

The agreement is based on the “100-year concessions for 17 oil fields with proven reserves of approximately 65 billion barrels” that the Venezuelan interim authorities have granted to North American Blue Energy Partners (NABEP). To put this deal in perspective, NABEP will “control” almost 5.4 times Petrobras’s reserves in Brazil, and 12 times Pemex’s reserves in Mexico. In a few days, NABEP has become, according to the fact sheet, “the second-largest private oil company by reserves in the world.” This is a remarkable ascent for a company that was founded just two years ago.

Private companies in the oil sector are nothing new. Since 2018, some of the oil activities previously handled by Venezuela’s national oil company, Petróleos de Venezuela, S.A. (PDVSA) have been transferred to private firms. This change from the public to the private sector was formalized in the reform of the Organic Hydrocarbons Law, approved in January 2026. Under this reform, PDVSA is gradually shifting from an exclusive operator to a contracting public entity for private investors.

The agreement with NABEP is notable for its large scope and the prominent role of the U.S. government. Although many details remain unknown, the fact sheet and prior announcements by President Trump and the interim authorities suggest how the agreement could work, its key institutional challenges, and its expected effect on U.S. energy policy and the Venezuela transition.

How the Agreement Could Be Implemented

According to the fact sheet, there are three main components to how the agreement will work:

1. Joint Agreement: The U.S. government and a parent company of NABEP will enter into a joint agreement governed by U.S. law. Under this agreement, the U.S. Department of Defense’s Office of Strategic Capital will hold a 35 percent equity stake in its corporate parent. Additionally, NABEP will execute an oil sale and purchase agreement that gives the U.S. government two purchase rights, divided into two parts: (1) 20 percent of the production, at cost, allocated for refilling the Strategic Petroleum Reserve, and (2) the right of first refusal for the remaining 80 percent.
   
   As part of the joint agreement with NABEP, the U.S. government will have a “veto power over the appointment of any member of the board of directors, and a majority of NABEP’s board of directors must be U.S. citizens.” This power gives the government effective control over the oil company’s management.
2. Concessions: Venezuela’s interim authorities will grant “100-year concessions” over 17 fields to NABEP. This is one of the deal’s more problematic legal issues (discussed further below).
3. NABEP’s Role: NABEP will operate some of the fields, as it is already doing in three projects. Given its limited track record in the oil industry and potential financial and operational constraints, the company could face major obstacles to expanding into the remaining 14 projects in the deal. Therefore, it could join with other international oil companies to operate those fields. As a result, NABEP has become a sort of parallel PDVSA, controlling oil operations in 17 projects. That is another source of legal problems.
    

The Institutional Fragilities of the Agreement

The reasons used in the fact sheet to justify the oil agreement are based on an accurate diagnosis of the collapse of the oil industry. But the solution offered falls short.

According to the fact sheet, the oil agreement is intended to recover the oil industry, destroyed by the “corrupt cronies of Maduro and Chavez,” and the negative influence of Chinese and Russian firms. Rebuilding the oil industry is essential for restoring Venezuela’s fragile state capacities. The U.S. government serves as a crucial anchor, helping to establish the institutions needed to restore the state’s capacity and uphold the rule of law. This strategy properly addresses the root causes of the collapse of the Venezuelan oil industry.

It should be noted that the current interim authorities represent more of an evolution of, rather than a full departure from, the “cronies of Maduro.” Remarkably, interim President Delcy Rodríguez was herself a prominent figure of Nicolás Maduro’s regime, first as director of PDVSA (2015), then as vice president (2018), and finally as oil minister (2024–2026).

The fact sheet accurately identifies what many experts consider to be the root cause of the oil industry’s collapse—the socialist policies advanced by Chávez and Maduro. But the solution offered is inadequate. First, the Venezuelan interim authorities cannot grant 100-year oil concessions. Under the reform of the Organic Hydrocarbons Law approved in January 2026, PDVSA, acting through PDVSA Petróleos, S.A. (PPSA) and joint ventures, can grant only specific oil services agreements, known as “production participation contracts,” to private firms such as NABEP. It is important to note that the production participation contracts are not concessions, and they do not grant any rights over the oil deposit. They are closer to a productive sharing agreement in which the private firm has only contractual rights on behalf of PDVSA.

Ambiguity about the legal title under which NABEP is acting increases the legal uncertainty that has so far deterred private investment in Venezuela’s oil sector. The doubt is even greater because NABEP’s role as a parallel national oil company could collide with Article 303 of the Venezuelan Constitution, which vests in PDVSA, or another entity of the government of Venezuela, the authority to control the oil industry.

The dubious constitutional mandate of the interim authorities adds another layer of uncertainty. According to the official position of the U.S. Departments of Justice and State, Maduro was not recognized as a duly elected president. Hence, Delcy Rodríguez was not a duly appointed vice president. In addition, the 180-day period during which the vice president can act as interim president expired in July.

When the U.S. government recognized Delcy Rodríguez as the sole head of state in March 2026, it was not because she had a democratic mandate, but because she had de facto control over the government following Maduro’s capture. In fact, according to the State Department, the 2015 National Assembly is the “last internationally recognized democratically elected entity in Venezuela.” This statement confirms that the interim authorities are not a democratically elected entity, but a temporary government that cannot enter into a long-term agreement that compromises 65 billion barrels of the country’s oil reserves.

Impacts on U.S. Energy Policies and the Venezuela Transition

Although there is no official record of where or what the 17 fields are, conservative independent estimates suggest NABEP’s three joint ventures could produce, during the last week of August, 124,000 barrels per day (bpd). In addition, the agreement includes eight greenfields, or new builds, meaning that oil production will take time. With this information, it is possible to conclude that the goal of 1.5 million bpd set by the interim authorities is a long-term and optimistic assessment. Other constraints, including infrastructural weaknesses (particularly ports) and the potential collapse of the energy grid, could also prevent a fast increase in output.

As experts have concluded, no relevant increase should be expected in the short term. The average U.S. oil consumption was about 20.6 million barrels per day in 2025. That means that the 20 percent of NABEP’s production that according to the fact sheet will be destined for the Strategic Petroleum Reserve will have little to no impact—at least for now—on the U.S. market.

That does not mean that the agreement is irrelevant. On the contrary, in the medium term, if implemented properly, the agreement could support a stable recovery of the oil industry. Reducing the influence of China, Russia, and Iran in Venezuela is a key objective of the  “America First” foreign policy. However, achieving this goal requires not only displacing those countries but also establishing stable, credible, and robust institutions that can facilitate Venezuela’s recovery.

This objective is only possible under a democratic government (although Venezuela’s recovery will require more than free and fair elections). In that regard, the fact sheet shows a clear tension. The document recognizes that the poor quality of the oil institutions favors the sector’s collapse, accurately noting that only a private-led sector, as part of a democratic transition, could create the conditions to increase production and support economic security in the hemisphere. At the same time, the document offers an opaque, fragile institutional arrangement with dubious constitutionality.

How will a newly elected government in a hypothetical future Venezuela respond? A key lesson from Venezuela’s oil history is that shortcuts often lead to negative outcomes, such as heightened political conflict and contract repudiation. Those risks are present with the announced oil agreement, considering its institutional weaknesses. Moreover, simply boosting oil production does not support a transition: Venezuela saw higher oil output from 2020 to 2024, and Maduro’s autocratic control strengthened. A democratic shift depends on transparent, well-defined, and equitable oil institutions, not just production increases. Consequently, a newly elected government will have to make hard decisions if this agreement is implemented in violation of fundamental and constitutional principles.

But these hard decisions can be avoided. History also offers an example of a constructive alliance on oil between the United States and Venezuela: the Corporación Venezolana de Economía Básica, a joint agreement between Nelson Rockefeller and the Corporación Venezolana de Fomento, implemented in 1947, through accountable and transparent institutions. That is the type of agreement that Venezuela needs: U.S. companies, supported by the U.S. government, working together with the Venezuelan government to promote prosperity and energy security across the hemisphere.

There is still time to avoid a crossroads that could jeopardize Venezuela’s transition and the oil industry’s recovery. The fact sheet accurately diagnoses how to tackle the root causes of the oil industry’s collapse. But the proper policies are needed to implement the solutions, aimed at building democratic institutions focused on the common good. To that end, implementation of the agreement should follow accountable, transparent, and public procedures under Venezuelan law, favoring broad political accords—including the 2015 National Assembly. Ideally, those accords would include a sunset or ratification mechanism that reduces uncertainty about how a future elected government will evaluate the agreement.

A durable America First energy strategy in the Western Hemisphere cannot rest on a 100-year concession not covered by the oil law, and by an interim government without a democratic mandate. Lasting energy security—for the United States and for Venezuela—must be built on legitimate institutions. Without them, it cannot endure.

José Ignacio Hernández is a senior associate (non-resident) with the Americas Program at the Center for Strategic and International Studies (CSIS).