US–Venezuela oil deal

How the story developed

On September 10, the United States Pentagon's Office of Strategic Capital acquired a 35 percent equity stake in North American Blue Energy Partners. The private venture holds 100-year development rights to 17 Venezuelan oil fields containing an estimated 65 billion barrels of crude. The partnership aims to invest up to $100 billion to modernize infrastructure and push daily production past one million barrels.

Under the agreement, the U.S. State Department gained the right to purchase 20 percent of the company's new production at cost. The provision is intended to refill the United States Strategic Petroleum Reserve.

By September 21, Continental Resources signed a memorandum of understanding to develop 30 billion barrels of oil in Venezuela's Ayacucho 2 block. The agreement was negotiated with interim President Delcy Rodríguez. Critics warned that the unprecedented arrangement turns the U.S. military into a corporate shareholder and invites massive cronyism.

On September 28, Halliburton signed memorandums of understanding with Eneva and WESCA to advance oil and gas development projects in Venezuela. The service contracts marked the operational beginning of the projected $100 billion infrastructure investment phase.

What to watch

• Venezuela expects a $76 billion capital influx into its hydrocarbon sector over the next five years.
• The planned infrastructure overhaul aims to create 324,000 direct and indirect jobs across the next decade.
• Oil fields in Zulia state are planned to generate their own independent electricity.
• Chevron plans to invest over $7 billion in the country over the next five years to expand its existing operations.