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Venezuela-US Oil Deal Faces Legal Challenges

Financial Times Companies •
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Experts and politicians warn the oil deal between Caracas and Washington risks violating Venezuelan law, raising questions about its sustainability. The agreement grants the Pentagon a 35% stake in a Venezuelan company awarded rights to one-fifth of the country's reserves, approximately 65bn barrels. Henrique Capriles, a leading opposition figure, cited "legal and constitutional problems," noting Donald Trump's claim of a 100-year concession would violate the constitution. Acting president Delcy Rodríguez contradicted this, stating licences would only be valid for 25 years. Capriles questioned the lack of a tender process before handing over resources to North American Blue Energy Partners, controlled by Alejandro Betancourt.

David Goldwyn and Andrea Clabough at the Atlantic Council said the 100-year concession "appears to stretch the limits" of the constitution, predicting legal challenges from existing contract holders, citizens, and future governments. José Ignacio Hernández, a Venezuelan legal expert in the US, noted the constitution mandates state-owned Petróleos de Venezuela (PDVSA) control the oil industry, requiring private investors to act as contractors or joint venture partners.

Elías Matta, former president of the national assembly's oil commission, defended the deal, arguing the constitution allows private capital participation. The Trump administration hopes the agreement accelerates investment, but potential investors are watching closely for legal and political sustainability, especially ahead of potential new elections.