Delcy Rodríguez responds to the controversy over Venezuelan oil after agreement with the US: It will have a big impact

Delcy Rodríguez, interim president of Venezuela, addressed public concerns regarding the country’s oil agreement with the United States on Saturday, August 29. She stated that the “historic” deal would enable Venezuela to maintain its “ownership” and “sovereignty” over its resources. The agreement, announced the day before, marks a significant shift in the nation's energy policy following months of strained relations with Washington. The pact was reached seven months after the military operation led by the United States that ousted former President Nicolas Maduro. Since taking power, Rodríguez has implemented reforms in the oil and mining sectors under pressure from the US, opening doors for foreign investment. In a televised address, she emphasized that Venezuela will retain control over its resources, clarifying that the country will receive minimum royalties of 16 percent from operations and a 34 percent tax on income derived from these activities. According to reports, the agreement allows the United States to operate 17 strategic fields in Venezuela, which have a potential production capacity of 65 billion barrels. Over the course of 25 years, Venezuela expects to generate revenue of approximately $209 billion through this partnership. Rodríguez explained that for each barrel produced and sold, nearly $19 would return directly to the country. Despite these financial projections, Venezuela faces challenges in maintaining its oil output. The nation holds the world’s largest reserves of petroleum, yet exploration of new fields has been virtually halted for nearly a decade. Rodríguez defended her decision to pursue diplomatic ties with the United States, arguing that it aligns with Venezuela’s goal of becoming a major energy power, a significant producer of oil, and a key exporter of gas and petrochemical products. Since January, Venezuela’s oil production has increased by 29.8%, reaching 1.2 million barrels per day by July. However, this figure still falls far short of the 3 million barrels per day recorded at the end of the last century. The country continues to struggle with infrastructure degradation and economic instability, which have contributed to the decline in output. Under the terms of the agreement, the United States is expected to invest up to $100 billion in Venezuela’s oil sector. This investment aims to boost production from the 17 strategic fields operated by American companies, potentially raising daily output to 1.5 million barrels. Industry experts suggest that achieving this level of production could take several years due to the need for modernization and technical upgrades. The agreement comes amid broader geopolitical tensions, including recent actions taken by Donald Trump, such as renaming a well-known Canadian lake, which sparked controversy with Canada. These developments highlight the complex dynamics between global powers and their influence on regional economies. As the implementation of the agreement progresses, ongoing monitoring will be essential to assess its impact on Venezuela’s economy and energy independence. The success of the partnership will depend on factors such as the effectiveness of foreign investment, the stability of political leadership, and the ability to overcome long-standing structural issues within the oil industry.