JOEL ROSE, HOST:
The Trump administration says it has struck a deal to take majority ownership over several Venezuelan oil fields. President Trump says that this agreement would give the U.S. control of 65 billion - that is billion with a B - barrels worth of oil. NPR's energy and climate correspondent Julia Simon is here with us now to explain what this actually means. Julia, what do we know about this deal so far?
JULIA SIMON, BYLINE: So NPR spoke with a U.S. official who is not authorized to speak publicly about the agreement. The official said the U.S. has secured 55% of the effective output of a new private joint venture between a private company in Venezuela and the U.S. government. Again, the number we're hearing is that the U.S. would have control of 65 billion barrels of oil. Now, this may sound like a lot, but Paasha Mahdavi - he's associate professor of political science at University of California, Santa Barbara, and he says there's more to the story.
PAASHA MAHDAVI: My initial reaction of Trump announcing taking 65 billion barrels is quite a shock. I mean, in context, that's a huge amount of oil. It's 20% of the country's proven reserves. But then, you know, upon reflection, you start to look at the deal, and you say, well, is Trump actually taking these oil reserves? Is the U.S. nationalizing Venezuela's oil? And the answer is no.
ROSE: OK, so if Venezuela still owns this oil, you know, what does that mean?
SIMON: Yeah, this oil is still underground. Right now, Venezuela still owns it. The new company would then extract that oil, Joel, and then the U.S. would get control of 55% of the output. But this type of deal that the U.S. government is talking about, it often isn't that attractive to international oil companies who play key roles because of their expertise and their investment. It's not clear who will rush in for this opportunity. And we reached out to Chevron, ConocoPhillips. They declined to comment. ExxonMobil did not respond to our request for comment.
ROSE: In his Truth Social post, President Trump wrote that the deal will, quote, "substantially lower gas prices for all Americans long into the future," unquote. I think that is a question a lot of people will be asking today. Is this going to reduce gas prices?
SIMON: Right. It's definitely the question. And oil experts say the idea that this deal would reduce gas prices was, quote, "absurd." It's not clear when this oil would actually be produced. Again, it's oil in reservoirs. It's underground. We're not talking about crude oil that's sitting in storage. And we're talking about oil that could take at least one to two years to produce, up to 10 years to produce. So there is no connection to gas prices right now.
ROSE: It sounds like there is a lot about this deal that is highly unusual. How solid do you think it is?
SIMON: Well, right now, this deal is being made with acting Venezuelan president Delcy Rodriguez, who was installed after the U.S. seized President Nicolas Maduro in January. Delcy Rodriguez hasn't been elected. There's a lot of questions about how legitimate this government is, and what's the government going to look like in three to five years when this oil really starts coming online?
I spoke to Gerald Kepes about this. He's president of Competitive Energy Strategies, an energy consultancy in Washington, D.C. Trump, in his announcement, said that Secretary of State Marco Rubio and Defense Secretary Pete Hegseth were involved in the deal. Kepes finds that very strange.
GERALD KEPES: When has the Department of Defense or War ever been involved with anything like this?
SIMON: Kepes says there are a lot of overarching questions about the legal standing of a deal like this.
ROSE: NPR's Julia Simon. Thank you very much, Julia.
SIMON: Thank you, Joel. Transcript provided by NPR, Copyright NPR.
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