After US forces carried Nicolas Maduro out of Caracas, Venezuela’s oil law was rewritten and a Pentagon linked venture obtained century long rights over 65 billion barrels. Washington calls it investment. Across Venezuela, Russia and China, it is being read as the conversion of military power into economic title.
Donald Trump has already supplied the epitaph for the Venezuelan oil agreement.
Speaking in Las Vegas on August 5, the American president described the attack on Venezuela as a “48 minute war”. He said Washington had recovered the cost of the operation from what it had taken out of the country “many, many, many times”. Then he stated the principle with unusual candour.
“To the victor belong the spoils.”
The sentence strips away the diplomatic language subsequently wrapped around the largest oil arrangement announced in modern Venezuelan history. This was not how a president normally describes investment, reconstruction or partnership. It was how a conqueror described the distribution of property after victory.
That does not, by itself, decide the legal validity of the contracts. Nor does it mean Venezuela could rebuild its ruined petroleum industry without foreign capital. But it identifies the question that must govern any examination of the agreement: was this a bargain freely made by Venezuela, or the legal settlement of an American military success?
The sequence matters
The agreement cannot be separated from the events that preceded it.
Beginning in August 2025, the United States increased military pressure in the Caribbean. Vessels were attacked, sanctioned tankers seized and Venezuela’s oil trade progressively constricted. Caracas said that a campaign presented as counter narcotics enforcement was intended to produce regime change and capture its petroleum.
On January 3, 2026, American forces attacked installations in Caracas and elsewhere, seized Maduro and his wife, Cilia Flores, and carried them to the United States. Washington called it an arrest. Across much of Latin America, Russia and China it was called a kidnapping.
Delcy Rodriguez then became acting president through Venezuela’s existing constitutional machinery. But she did not inherit an independent field of action. The United States had demonstrated its ability to strike Venezuelan territory and remove its head of state. It retained sanctions and licensing powers, controlled access to export markets and assumed authority over the proceeds of Venezuelan oil sales.
Only twelve days after Maduro was taken, Rodriguez submitted a fundamental reform of the Hydrocarbons Law. It was enacted before the end of January. Private operators gained the ability to produce and market petroleum, exercise greater control over income, hold funds abroad and submit disputes to arbitration. The state majority model built under Hugo Chavez was dismantled at remarkable speed.
In late August came the reward. North American Blue Energy Partners, or NABEP, was given reported rights over 17 fields containing approximately 65 billion barrels, about one fifth of Venezuela’s proved reserves. The field rights may last 100 years. The Pentagon is reported to hold a 35 per cent interest in the parent company. Washington may buy 20 per cent of production at cost, enjoy preference over the remainder and exercise influence over appointments to the company’s board.
The Venezuelan National Assembly later approved the arrangement. Formal approval matters. But ratification by institutions operating beneath the continuing power of the state that removed the president does not answer the question of duress. It merely moves the argument from the signature to the conditions surrounding the vote.
Is this an equitable bargain?
Venezuela desperately needs investment. Its petroleum system requires electricity, repaired pipelines, drilling equipment, diluent and access to specialised refineries. Foreign companies accepting substantial risk are entitled to earn a return.
But the published terms do not resemble a negotiation between equals.
A century is an extraordinary concession. It binds not merely the Rodriguez administration but generations not yet born. Under the previous Venezuelan law, mixed enterprises normally received an initial term of 25 years, with a possible extension of no more than 15. NABEP’s reported rights could last two and a half times longer than that maximum.
The American benefits are concrete. They include equity, corporate influence and oil purchasable at production cost. The Venezuelan benefits are largely forecasts.
Rodriguez says the programme could attract $100 billion in investment and generate $209 billion for the Venezuelan state over 25 years. But investment is not a payment to Venezuela. It creates the assets from which the investor expects to profit. We do not know how much is firmly committed, when it must be spent, whether financing and management charges can be recovered from production, or what happens if the targets are missed.
The $209 billion is similarly deceptive when presented as one enormous sum. Spread across 25 years it is about $8.4 billion annually before discounting. The government’s assumptions suggest approximately $19 reaches the state from a barrel priced at $65.
Most troubling is the right to buy oil at cost. The value of petroleum to a producing country lies in the difference between the cost of extracting it and the international price. That difference is the resource rent. If Washington receives a guaranteed share without paying a market price, Venezuela may be surrendering precisely the value that belongs to the owner of the resource.
Until the contracts disclose how cost is calculated, audited and protected against related company charges, nobody can responsibly claim the Venezuelan people are receiving fair value.
What Chavez attempted
Hugo Chavez did not invent Venezuelan oil nationalism. It was built through the 1943 Hydrocarbons Law, the fifty fifty division of profits, the creation of OPEC and the nationalisation of 1976. Chavez radicalised that inheritance.
Foreign companies were permitted to participate, but generally through mixed enterprises in which PDVSA retained control. Royalties were set around 30 per cent and petroleum income tax around 50 per cent. The governing principle was that foreign capital could help extract the oil, but the state must control the industry and capture most of the rent.
For a time, the Venezuelan poor benefited materially. Oil financed the social missions in healthcare, food, education, housing and pensions. Between 1999 and 2012, measured poverty fell from about 49 per cent to 30 per cent. Extreme poverty, unemployment, inequality, illiteracy and child mortality also declined. Whatever one thinks of Chavez, those gains cannot honestly be erased.
Yet neither can the failure that followed.
PDVSA was turned from a technically respected oil company into a treasury, welfare agency and instrument of foreign policy. Investment and maintenance were sacrificed to immediate expenditure. Experienced personnel were dismissed after the 2002 to 2003 strike. Political loyalty displaced competence.
Most seriously, a temporary oil boom was treated as permanent income. Venezuela distributed the harvest while neglecting the field. It did not save enough abroad, diversify production or construct institutions capable of protecting social provision when prices fell. Maduro compounded those errors. American sanctions then transformed a grave domestic failure into a national catastrophe by restricting finance, tankers, diluent, equipment and access to payment systems.
The Chavez model was therefore more equitable in intention and, during its successful years, in measurable social outcome. But it was not durable. It transferred oil wealth to poorer Venezuelans while degrading the machinery that created it.
The new model presents the opposite danger. It may repair the machinery while transferring control and much of the future surplus elsewhere.
Iran’s warning
The closest historical comparison is the Iranian Oil Consortium Agreement of 1954.
Iranian prime minister Mohammad Mossadegh had nationalised the Anglo Iranian Oil Company in 1951. Britain responded with an embargo. In 1953, a coup supported by the CIA and MI6 removed Mossadegh and restored the Shah’s authority. One year later, the new government accepted a Western oil consortium.
Iran retained nominal ownership through the National Iranian Oil Company. Effective control over production, refining, transport and international marketing passed to foreign operating companies. BP received 40 per cent of the consortium, five American majors together received 40 per cent, Shell 14 per cent and France’s CFP six per cent.
Iran was promised an approximate fifty fifty division of profits, but Iranian auditors could not fully examine the books and Iranians were excluded from the consortium board. The arrangement lasted 25 years with possible extensions taking it to 40.
The resemblance to Venezuela is unmistakable: economic strangulation, the removal of a nationalist government, a successor needing immediate petroleum income, nominal national ownership and effective foreign control.
In important respects, however, the Venezuelan settlement appears more extreme. Its reported duration is 100 years, against a maximum of 40 in Iran. The Pentagon itself becomes an economic participant, collapsing the distance between the military intervention and the commercial reward. And the right to purchase production at cost may be more advantageous than an ordinary profit sharing agreement.
The Iranian settlement restored output and revenue. It also fatally damaged the Shah’s legitimacy. For millions of Iranians, the consortium proved that the coup had not merely changed a government. It had restored foreign command over the national patrimony. That memory helped nourish the revolution of 1979.
Venezuela may be planting the same political mine beneath its future.
The test is the Venezuelan household
Rodriguez offers a pragmatic defence. Oil underground pays no wages, repairs no hospitals and keeps no lights burning. Venezuela currently produces around 1.25 million barrels a day, far below the three million or more achieved in the 1990s. Without external capital, much of its vast reserve may remain economically useless.
That argument is serious. Increased production could provide foreign exchange, employment, electricity investment and government revenue. Chevron’s separate promise to invest more than $7 billion and double its Venezuelan output shows what a genuine industrial recovery might require.
But production is not upliftment. An oilfield can flourish while the community beside it remains poor, polluted and dark. Venezuela already knows that history.
For the agreement to command legitimacy, every contract and ownership structure should be published. The state take must be independently calculated and oil priced transparently. Local employment, training and environmental restoration must be binding. Revenue should enter an audited Venezuelan reconstruction fund. The concession should be reviewable by a government possessing an uncontested democratic mandate.
None of those safeguards has yet been demonstrated.
The legal position must also be stated carefully. Article 52 of the Vienna Convention makes a treaty void when its conclusion has been procured by the threat or use of force contrary to the United Nations Charter. But the Venezuelan arrangement may comprise several corporate contracts and domestic concessions as well as an interstate agreement. Its precise enforceability cannot be determined until those instruments are disclosed.
The factual conclusion is clearer. The beneficiary state attacked Venezuela, removed its president, controlled its principal revenue stream and then obtained exceptional rights over its petroleum. Trump himself described the result as the spoils of victory.
Chavez proved that oil income could reduce poverty, but failed to preserve the industry that produced it. The new settlement may restore the industry, but it has yet to prove that Venezuelans will own, control or even receive the prosperity it creates.
The question is not whether foreign capital can make Venezuelan oil flow again. It can. The question is whether the oil will rebuild Venezuela, or whether Venezuela has merely become the ground from which somebody else’s wealth is extracted.