MARY LOUISE KELLY, HOST:
Let's stay with this new agreement that the Trump administration is celebrating, saying it will give the U.S. access to vast amounts of Venezuelan oil. But as you just heard, it may be years before the oil actually gets to U.S. gas pumps. And as John Otis reports, the deal could help keep Venezuela's unpopular U.S.-backed interim president in power.
JOHN OTIS, BYLINE: Trump calls it, quote, "the biggest oil deal in world history." Under the 25-year agreement announced Friday, the U.S. government will partner with an unnamed private company to develop 17 untapped oil fields in Venezuela. Trump claims the deal will double American petroleum reserves by giving the U.S. majority control over 65 billion barrels of Venezuela's proven oil reserves.
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PRESIDENT DELCY RODRÍGUEZ: (Speaking Spanish).
OTIS: For her part, Venezuela's acting president Delcy Rodríguez claimed in a speech that the arrangement will bring her country jobs, foreign investment and more than $209 billion in oil taxes.
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RODRÍGUEZ: (Speaking Spanish).
OTIS: "Our country has the largest oil reserves in the world," she said, "but what good is it if it remains in the ground?" It's a dramatic U-turn for Venezuela. Its socialist government spent much of the past 25 years lambasting Washington, shooing away U.S. oil companies and nationalizing their assets.
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HUGO CHÁVEZ: (Speaking Spanish).
OTIS: That's the late President Hugo Chávez in 2007, celebrating his seizure of U.S.-operated oil fields in eastern Venezuela. Eventually, amid government mismanagement, corruption and U.S. sanctions, Venezuela's oil production plummeted. In January this year, U.S. military forces removed authoritarian leader Nicolás Maduro from power and established a pro-Washington government led by Rodríguez. Trump then called on U.S. oil companies to invest $100 billion in Venezuela. But later, at a White House summit with U.S. oil majors, ExxonMobil CEO Darren Woods was wary.
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DARREN WOODS: We first got into Venezuela back in 1940s. We've had our assets seized there twice. And so you can imagine to reenter a third time would require some pretty significant changes.
OTIS: Venezuela has made some of those changes, like reducing taxes and allowing international arbitration for contract disputes. But Francisco Monaldi, who directs the Latin America Energy Program at Rice University says U.S. firms still complain about high taxes, opaque bidding procedures and rampant influence pedaling.
FRANCISCO MONALDI: If you talk to the big companies here, they are all really concerned about how things are being handled.
OTIS: Oil production has inched up this year from just below to just above 1 million barrels per day. But that's a far cry from the 3.4 million daily barrels Venezuela produced back in the 1990s. It marks the first time Washington will become directly involved in oil production since World War II. But there are few details, and it remains unclear whether private oil companies will follow Trump's lead.
AMY MYERS JAFFE: My gut reaction is that this doesn't make any difference whatsoever.
OTIS: Amy Myers Jaffe is an energy expert at New York University. She says Venezuela's oil fields, pipelines, refineries and ports are all badly degraded and that ramping up production will take years.
JAFFE: These are fields that take a lot of work. It's not like Iraq or Saudi Arabia where you're going to stick a needle in the ground, and the oil is just going to flow out.
OTIS: Many average Venezuelans are also skeptical.
MARGARITA YEPES: (Speaking Spanish).
OTIS: "Now the Americans will practically own all our oil," says Caracas resident Margarita Yepes. Even so, David Smilde, a Venezuela scholar at Tulane University, says the oil deal could provide a boost to acting President Rodríguez. She heads a deeply unpopular authoritarian regime which has denied opposition demands for free elections.
DAVID SMILDE: They do not want to relinquish power, and they know that pleasing the Trump administration and getting U.S. investment is key.
OTIS: As a result, he says, the oil deal might speed up Venezuela's economy but slow down its transition to democracy.
For NPR News, I'm John Otis. Transcript provided by NPR, Copyright NPR.
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