By Horizonte Cubano News
President Donald Trump calls it the biggest oil deal in world history.
Venezuela’s acting president, Delcy Rodríguez, calls it an agreement capable of helping revive the Venezuelan economy.
Representative María Elvira Salazar says the agreement can benefit both countries, although she argues that Rodríguez is the wrong person to guarantee its future.
Those are extraordinary claims surrounding an extraordinary transaction.
The numbers alone demand attention.
More than 65 billion barrels of proven Venezuelan oil reserves.
Seventeen strategic oil fields.
A Venezuelan production target exceeding 1.5 million barrels per day.
Potential private investment approaching $100 billion.
Potential Venezuelan government revenue measured in the hundreds of billions of dollars.
And some contractual rights reportedly extending for as long as 100 years.
If this truly is one of the largest energy agreements ever negotiated, there is a remarkably simple question that Americans and Venezuelans should be asking:
Where is the complete agreement?
This Is Bigger Than Donald Trump
Supporters of President Trump may believe this is an extraordinary strategic achievement.
Perhaps it is.
The agreement could eventually increase Venezuelan production, strengthen energy supplies in the Western Hemisphere, reduce Chinese influence and generate enormous revenues for a Venezuelan economy badly damaged by years of mismanagement, underinvestment and sanctions.
Those possibilities deserve serious consideration.
But an agreement involving tens of billions of dollars, enormous petroleum reserves and potentially century-long contractual rights cannot depend on whether one supports Donald Trump.
Trump will eventually leave office.
Venezuela will eventually have another government.
The oil will remain.
The contracts will remain.
And potentially billions of barrels will remain subject to arrangements negotiated today.
That is precisely why transparency matters.
What Exactly Does the United States Own?
Trump says the United States has secured majority control over more than 65 billion barrels of proven Venezuelan reserves.
That phrase requires explanation.
Does the United States government own petroleum reserves?
Does a private company own them?
Does Venezuela retain ownership while granting production rights?
Does the United States own equity in a joint venture?
Does Washington simply have preferential purchasing rights?
How much of the reported 55 percent American control represents actual equity?
How much represents contractual rights to purchase oil?
Those distinctions are not technical trivia.
They determine what the agreement actually means.
Venezuela says it retains sovereignty over its natural resources.
Washington says it has obtained majority control.
Both propositions might potentially coexist under a carefully structured production agreement.
But the public should not have to guess how.
Publish the structure.
Twenty-Five Years or One Hundred?
Another issue requires clarification.
Delcy Rodríguez has described a 25-year bilateral project involving 17 strategic oil fields.
Other reporting indicates that the newly created operating structure may possess rights involving those fields for 100 years.
Those are dramatically different periods.
Perhaps they refer to different layers of the transaction.
If so, explain them.
What lasts 25 years?
What lasts 100 years?
What happens after the first 25?
Can Venezuela terminate the arrangement?
Can the United States?
Can a future democratically elected Venezuelan government renegotiate it?
What penalties would apply?
A contract potentially binding generations of Venezuelans deserves answers to those questions.
Who Authorized Delcy Rodríguez?
Representative María Elvira Salazar has identified another fundamental problem.
She supports the economic concept but questions the person signing on Venezuela’s behalf.
That contradiction cannot simply be ignored.
If Delcy Rodríguez lacks sufficient democratic legitimacy to guarantee the agreement, then what legal authority allows her government to enter an agreement potentially affecting Venezuelan petroleum for decades?
That question matters regardless of whether someone supports or opposes Rodríguez.
International energy companies need legal certainty.
Banks need legal certainty.
Investors need legal certainty.
The Venezuelan people need legal certainty.
And the United States government should want legal certainty.
A $100 billion investment program cannot operate indefinitely on political assurances.
And Who Authorized Washington?
There is another side to the constitutional question.
What exactly has the United States government committed?
The President possesses broad foreign-policy authority.
The executive branch can negotiate with foreign governments.
Federal agencies possess numerous statutory authorities.
But if the United States government is acquiring an ownership interest, guaranteeing purchases, financing petroleum development or assuming financial obligations, Congress may have a role.
That depends on the actual structure.
Again:
Show the agreement.
If congressional authorization is unnecessary, explain the statutory authority.
If congressional appropriations will eventually be required, say so.
If private investors carry the entire financial risk, identify the mechanism.
Transparency would resolve much of this debate.
Who Is Putting Up $100 Billion?
This may be the biggest unanswered financial question.
Administration officials have spoken about approximately $100 billion in private investment.
Excellent.
From whom?
Which companies have committed?
How much has each committed?
Are these binding commitments?
Letters of intent?
Projected investments?
Government estimates?
Will American taxpayers guarantee any portion of the financing?
Will federal agencies provide loans?
Loan guarantees?
Insurance?
Preferential purchasing agreements?
What happens if private companies decide the risk is too great?
Venezuela’s petroleum infrastructure requires enormous investment.
Pipelines.
Electricity.
Drilling equipment.
Ports.
Upgraders.
Refineries.
Security.
Roads.
Housing and services for workers.
Environmental remediation.
Sixty-five billion barrels underground have enormous theoretical value.
But oil underground does not lower gasoline prices.
Oil must be financed, extracted, processed, transported, refined and sold.
That takes money.
And time.
Who Is the Private Partner?
The public also deserves clarity about the private companies involved.
If private businesses are receiving access to one of the largest petroleum reserves on Earth, their ownership should be transparent.
Who are the beneficial owners?
How were they selected?
Was there competitive bidding?
What experience do they have?
What financial capacity do they possess?
What relationships do they have with American officials?
What relationships do they have with Venezuelan officials?
What compliance requirements apply?
What anti-corruption protections exist?
These questions should not be considered hostile to the agreement.
They are necessary to protect it.
Venezuela’s Oil Belongs to Venezuela
Whatever contractual structure emerges, one principle should remain fundamental.
Venezuela’s natural resources belong to Venezuela under Venezuelan law.
Foreign investment can help develop those resources.
American companies can provide capital.
Technology can increase production.
Long-term purchasing arrangements can provide stability.
The United States can benefit.
Venezuela can benefit.
There is nothing inherently illegitimate about mutually beneficial petroleum commerce.
But investment is different from ownership of another country’s natural patrimony.
The agreement must make that distinction unmistakable.
Otherwise, opponents will understandably describe the arrangement not as investment but as appropriation.
María Elvira Salazar Has Identified the Agreement’s Central Contradiction
Representative Salazar says the agreement can bring prosperity, stability and security.
She also says Delcy Rodríguez and remnants of the Maduro system cannot represent Venezuela’s future.
Those two positions create an unavoidable question.
If Rodríguez cannot guarantee Venezuela’s political future, how can agreements negotiated under her authority guarantee Venezuela’s petroleum future for generations?
Salazar’s answer appears to be that free elections and democratic institutions are ultimately necessary to make the arrangement durable.
That is a reasonable argument.
But it also strengthens the case for transparency now.
A future Venezuelan democracy should not inherit a massive agreement it was never permitted to examine.
Democracy Cannot Begin With a Secret Contract
If Washington’s stated objective is eventually a democratic Venezuela, then the economic architecture being constructed today should be capable of surviving democratic scrutiny tomorrow.
Publish the contracts.
Publish the ownership structure.
Publish the financial commitments.
Publish the revenue-sharing formula.
Identify the companies.
Identify government guarantees.
Explain congressional authority.
Explain Venezuelan constitutional authority.
Establish independent audits.
Create anti-corruption safeguards.
And disclose how revenues will reach the Venezuelan people.
If the agreement is genuinely beneficial, transparency should strengthen it.
Follow the Money
Venezuela has already lived through decades in which enormous petroleum wealth failed to produce prosperity proportional to its resources.
That cannot happen again.
If production reaches 1.5 million additional barrels per day, where does the revenue go?
How much goes to Venezuela?
How much goes to operating companies?
How much goes to the United States?
How much services investment?
How much services debt?
How much reaches infrastructure, hospitals, electricity, schools and communities?
How will Venezuelans verify those numbers?
A new petroleum agreement should not merely change who controls the flow of money.
It should change the level of accountability surrounding that money.
This Could Be an Opportunity
Horizonte Cubano News is not arguing that the United States should reject Venezuelan oil.
Quite the opposite.
A transparent energy partnership could benefit both countries.
Venezuela needs enormous capital investment.
The United States wants secure energy supplies.
American companies possess technology and financing capacity.
Venezuelans need jobs and economic recovery.
There is room for mutual benefit.
But the larger the opportunity, the greater the obligation to establish legitimacy.
The Simplest Question
Donald Trump says this is the biggest oil deal in world history.
Then treat it like one.
Do not ask Americans to understand it from a social-media post.
Do not ask Venezuelans to trust promises.
Do not ask investors to guess.
Do not ask Congress to learn the details from newspapers.
And do not ask future generations to honor obligations they cannot examine today.
Publish the agreement.
Let Venezuelan constitutional lawyers examine it.
Let American lawyers examine it.
Let Congress examine it.
Let economists examine it.
Let petroleum engineers examine it.
Let investors examine it.
And above all:
Let the Venezuelan people examine what has been negotiated involving their country’s most valuable natural resource.
Perhaps the agreement really is historic.
Perhaps it really can help rebuild Venezuela.
Perhaps it really can benefit American consumers.
Perhaps it really can weaken China’s strategic influence in the hemisphere.
If so, transparency will not destroy the agreement.
Transparency will help legitimize it.
The bigger the deal, the stronger the case for showing the public exactly what was signed.
Horizonte Cubano News — Analysis and commentary on Cuba, Venezuela, the United States and the future of the hemisphere.