$65 Benchmark: Contract financial models use a baseline price of $65 per barrel, which scales dynamically with global market prices.
$19 Fixed Royalty: Venezuela receives a fixed $19 payout per barrel produced and sold to the U.S.
At-Cost Purchasing: The U.S. buys its share at strict extraction cost, bypassing market markups and saving billions while Brent crude trades over $90.
$209B Annual Payout: The royalty and corporate tax structure project $209 billion annually for Caracas at full production.$100B
Private Levy: U.S. oil firms cover the $100 billion infrastructure cost entirely out of pocket before realizing profits from their 45% stake.
The 55% Split: The venture extracts the crude, immediately routing 55% of the total output directly to U.S. ownership.
At-Cost Buying: The U.S. purchases its 55% share at the exact cost of extraction, bypassing global market markups.
Oil infrastructure in Venezuela requires significant investment. For the U.S. to scale up production, repairs and modernization are needed. It make take years.
A deal signed with an unelected government that was installed after military intervention. What company is going to invest the required billions fixing and upgrading infrastructure in the hope the deal holds long enough to recover the billions previously lost in Venezuela plus the massive new investment? Good money after bad in an extremely high risk environment that's politically volatile.
Like Darren Woods the Exxon CEO said earlier this year, the Venezuelan market is 'uninvestable' right now.
Not to mention oil companies spent decades pulling out of Venezuela due to their nationalization efforts. Now you want them to risk spending billions investing in new infrastructure again? All of this is in the backdrop of an increase in moving towards renewable energies.
> What company is going to invest the required billions fixing and upgrading infrastructure in the hope the deal holds long enough to recover the billions previously lost in Venezuela plus the massive new investment?
Especially given that the reason Venezeuela is in this situation is that in 2007 Chavez effectively siezed all oil related assets in the country and brought all production under state control, causing all of the major oil companies present at the time to exit. It's not like they don't remember this mess, if you're exxon do you dump money in this market hoping the next election doesn't see you repeating 2007 all over again? I don't...
This oil deal is a way for EM and CP to recoup the billions they lost during the Chavez regime. Venezuela has judgement orders against them that were partially paid but never settled because their country is in such an economic mess. Prior ventures in Venezuela stipulated a majority shareholder stake for the state-controlled PDVSA but this time American companies will get a 51% stake to ensure anything to do with operational or marketing decisions don't get vetoed and they have final say. This means Venezuela will get a fix amount for every barrel sold but all extra profits will go to the American oil companies as a return for their investment as well as a way to fully pay their due compensation. Once their judgements are fulfilled and they are made whole, the deal can be renegotiated so that Venezuela can get a bigger share from their national resource.
I mean, the funds are purposely being routed outside of the US to avoid recuperation so far. Possibly once they’re here that might be the case, it depends on if courts rule they’ve got right to those dollars or not.
I doubt the two are interested in partaking in actual investment in the country though.
? I'm not sure what you're talking about. Chevron is already there and recouping their losses as they have a US sanctions license and are allowed to deduct legacy PDVSA debt off their top line. The remainder of their revenue gets posted as usual in their US filed financial reports.
easy, oil company promises trump they will do it with money up front. Trump gives them money that wasn't earmarked for it, and the company does nothing but lip service about difficulties and consultants and whatever and pockets most of the cash. In 1-4 years they end up keeping all the money or giving back a small portion of it in a "settlement"
Glad someone else said it. Venezuela neglected their extraction infrastructure. Houston can refine this black tar oil, but it’ll require new shipping lines and crush American and Canadian extractors.
Even if we helped to expedite a rebuild, it’d take years. By that time, most oil dependent countries will have shifted to renewable to alternative energy sources away from middle eastern oil.
I do not think there are any "facts" yet. Nobody seen any paperers as far as I know. There are some information related - how is it really looks on paper if that even exists we do not know.
Seems like a good deal for the future. Oil isn’t going anywhere l. Even if we switch one hundred percent to renewables for energy(not going to happen), but even if we did, you can’t make plastic out of solar
If we switched 100% to renewable energy, the amount of oil demand (for things like plastic) will be waaaaay less. So the oil market conversation will be completely different.
> even if we did, you can’t make plastic out of solar
You absolutely can, though.
Petroleum/oil/plastic is just a bunch of long chain hydrocarbons in a fairly high-energy arrangement. If you're willing to supply the energy part from somewhere else (like solar), there is absolutely nothing in the world stopping you from making your own.
It gets tiring how this crap is made up, there doesn't appear to be any US company that has agreed to do it? Its just an announcement of a pipe dream and the media obsesses over it which I suppose was the point of the Trump regime making it up to placate the gas price anger somewhat for maybe 2 months during the midterms until people realize its bs.
Wait so Venezuela is already producing 1.25m bpd and the plan is to produce 1.5m bpd? Am I reading that article correctly? So the next boost will be 20% output increase eventually?
1.5M barrels/day is an initial goal set way below standards to make entry easier. Venezuela was producing over 3M at its peak before Chavez so ultimately they want to get back to those numbers and beyond.
Well, there is no any need to long winded discussion on a base statement "The U.S. Venezuela oil deal won't lower your gas prices." That super simple - any development for that deal, no matter what need years till oil will come. Done.
I didn't say heavy/extra heavy sour can't be refined. I said it's not good for refining into gasoline. It's mostly refined into heating oil, asphalt, jet fuel, diesel fuel, and other petrochemicals for plastics.
The people that need to read and understand this won’t. Getting knowledge to those people is almost a lost cause. I really don’t know how to bridge the gap to where factual knowledge is generated and how to deliver it to these people that only listen to what Fox News tells them.
The problem here is that the article says the deal won't lower your gas prices, but then waits until the almost end to explain it's because the infrastructure needs time to be developed. There are other good reasons on why this deal may fall apart (the current government, the lack of committed private partners on the US side). By the way, I think the whole - there's no national oil company for the US like PEMEX or ARAMCO - angle is hilarious, if Trump announced that set up the NPR folks would flip out about how he was upending the free markets.
"We have no government-owned operational capability per se in the oil and gas sector," says Gerald Kepes, president of Competitive Energy Strategies, an energy consultancy in Washington, D.C. "The question is, who's going to operate on the ground?"
Really? We're going to be dumb about this? It's whichever oil company buys the most crypto TrumpCoins, Mar-A-Lago visits, and/or copies of Melania's horrible movie/book.
I'm sorry but tomorrow is Taco Tuesday. Isn't this going to be canceled tomorrow and it will all be revealed to be a ploy to manipulate the stock market?
Tomorrow all of the big sister CEOs are invited to the WH to be told exactly what they will be required to do in Venezuela and how much money they will make after the Drumph family rake-off. Whether they do it or just drag their feet until Dipshit can be impeached remains to be seen.
KoseteBamse | 14 hours ago
Here is some facts about the deal:
$65 Benchmark: Contract financial models use a baseline price of $65 per barrel, which scales dynamically with global market prices.
$19 Fixed Royalty: Venezuela receives a fixed $19 payout per barrel produced and sold to the U.S.
At-Cost Purchasing: The U.S. buys its share at strict extraction cost, bypassing market markups and saving billions while Brent crude trades over $90.
$209B Annual Payout: The royalty and corporate tax structure project $209 billion annually for Caracas at full production.$100B
Private Levy: U.S. oil firms cover the $100 billion infrastructure cost entirely out of pocket before realizing profits from their 45% stake.
The 55% Split: The venture extracts the crude, immediately routing 55% of the total output directly to U.S. ownership.
At-Cost Buying: The U.S. purchases its 55% share at the exact cost of extraction, bypassing global market markups.
Oil infrastructure in Venezuela requires significant investment. For the U.S. to scale up production, repairs and modernization are needed. It make take years.
PicoRascar | 13 hours ago
A deal signed with an unelected government that was installed after military intervention. What company is going to invest the required billions fixing and upgrading infrastructure in the hope the deal holds long enough to recover the billions previously lost in Venezuela plus the massive new investment? Good money after bad in an extremely high risk environment that's politically volatile.
Like Darren Woods the Exxon CEO said earlier this year, the Venezuelan market is 'uninvestable' right now.
RobertPham149 | 13 hours ago
Not to mention oil companies spent decades pulling out of Venezuela due to their nationalization efforts. Now you want them to risk spending billions investing in new infrastructure again? All of this is in the backdrop of an increase in moving towards renewable energies.
RIP_Soulja_Slim | 10 hours ago
> What company is going to invest the required billions fixing and upgrading infrastructure in the hope the deal holds long enough to recover the billions previously lost in Venezuela plus the massive new investment?
Especially given that the reason Venezeuela is in this situation is that in 2007 Chavez effectively siezed all oil related assets in the country and brought all production under state control, causing all of the major oil companies present at the time to exit. It's not like they don't remember this mess, if you're exxon do you dump money in this market hoping the next election doesn't see you repeating 2007 all over again? I don't...
CauliflowerDaffodil | 5 hours ago
This oil deal is a way for EM and CP to recoup the billions they lost during the Chavez regime. Venezuela has judgement orders against them that were partially paid but never settled because their country is in such an economic mess. Prior ventures in Venezuela stipulated a majority shareholder stake for the state-controlled PDVSA but this time American companies will get a 51% stake to ensure anything to do with operational or marketing decisions don't get vetoed and they have final say. This means Venezuela will get a fix amount for every barrel sold but all extra profits will go to the American oil companies as a return for their investment as well as a way to fully pay their due compensation. Once their judgements are fulfilled and they are made whole, the deal can be renegotiated so that Venezuela can get a bigger share from their national resource.
RIP_Soulja_Slim | 4 hours ago
I mean, the funds are purposely being routed outside of the US to avoid recuperation so far. Possibly once they’re here that might be the case, it depends on if courts rule they’ve got right to those dollars or not.
I doubt the two are interested in partaking in actual investment in the country though.
CauliflowerDaffodil | 4 hours ago
? I'm not sure what you're talking about. Chevron is already there and recouping their losses as they have a US sanctions license and are allowed to deduct legacy PDVSA debt off their top line. The remainder of their revenue gets posted as usual in their US filed financial reports.
RIP_Soulja_Slim | 4 hours ago
That's not really remotely the same thing as discussing cash inflows from this deal acting as settlement dollars, is it now?
CauliflowerDaffodil | 4 hours ago
Sure it is. Those get taken off the top.
RIP_Soulja_Slim | 4 hours ago
Revenue isn't recuperation of losses. You're conflating two different things here, I think you know that.
CauliflowerDaffodil | 4 hours ago
Recuperation of losses get taken off the top and doesn't get counted as revenue. You need to understand the difference.
dfpw | 8 hours ago
easy, oil company promises trump they will do it with money up front. Trump gives them money that wasn't earmarked for it, and the company does nothing but lip service about difficulties and consultants and whatever and pockets most of the cash. In 1-4 years they end up keeping all the money or giving back a small portion of it in a "settlement"
CauliflowerDaffodil | 5 hours ago
Chevron is already there outputting about a quarter of its daily totals.
Microplasticsharts | 13 hours ago
This is a meaningless off take agreement, they did it for a few days headlines.
Just_Candle_315 | 2 hours ago
It's not working oil is up again today $90 a barrel and reserves are at a 50 year low this is going to be a fucking disaster for consumers
SweatyAd8914 | 13 hours ago
Glad someone else said it. Venezuela neglected their extraction infrastructure. Houston can refine this black tar oil, but it’ll require new shipping lines and crush American and Canadian extractors.
Even if we helped to expedite a rebuild, it’d take years. By that time, most oil dependent countries will have shifted to renewable to alternative energy sources away from middle eastern oil.
vovap_vovap | 11 hours ago
I do not think there are any "facts" yet. Nobody seen any paperers as far as I know. There are some information related - how is it really looks on paper if that even exists we do not know.
Stepfordhusband69 | 13 hours ago
Seems like a good deal for the future. Oil isn’t going anywhere l. Even if we switch one hundred percent to renewables for energy(not going to happen), but even if we did, you can’t make plastic out of solar
improvthismoment | 13 hours ago
If we switched 100% to renewable energy, the amount of oil demand (for things like plastic) will be waaaaay less. So the oil market conversation will be completely different.
Stepfordhusband69 | 8 hours ago
Ok let me know when we get close to 100 percent renewable.
improvthismoment | 8 hours ago
Doesn't need to be 100%, I was just responding to your comment about "even if we switch one hundred percent..."
Significant reductions are very possible in the real world, and would make a big difference in both the oil market as well as the climate.
onan | 11 hours ago
> even if we did, you can’t make plastic out of solar
You absolutely can, though.
Petroleum/oil/plastic is just a bunch of long chain hydrocarbons in a fairly high-energy arrangement. If you're willing to supply the energy part from somewhere else (like solar), there is absolutely nothing in the world stopping you from making your own.
saynay | 11 hours ago
Has there been any reputable source claiming this deal is actually real? i.e. not a US Government source.
The Trump admin has a tendency to announce completion of "deals" that the other side has not agreed to.
Illustrious-Lime-878 | 8 hours ago
It gets tiring how this crap is made up, there doesn't appear to be any US company that has agreed to do it? Its just an announcement of a pipe dream and the media obsesses over it which I suppose was the point of the Trump regime making it up to placate the gas price anger somewhat for maybe 2 months during the midterms until people realize its bs.
CauliflowerDaffodil | 5 hours ago
It's an easy find: https://www.idnfinancials.com/news/68086/delcy-rodr%C3%ADguez-oil-sales-to-america-reach-us209-billion
rainman_104 | 4 hours ago
Wait so Venezuela is already producing 1.25m bpd and the plan is to produce 1.5m bpd? Am I reading that article correctly? So the next boost will be 20% output increase eventually?
CauliflowerDaffodil | 4 hours ago
1.5M barrels/day is an initial goal set way below standards to make entry easier. Venezuela was producing over 3M at its peak before Chavez so ultimately they want to get back to those numbers and beyond.
vovap_vovap | 14 hours ago
Well, there is no any need to long winded discussion on a base statement "The U.S. Venezuela oil deal won't lower your gas prices." That super simple - any development for that deal, no matter what need years till oil will come. Done.
content_enjoy3r | 11 hours ago
Well more than that, Venezuela's oil is heavy sour and extra heavy sour. It's not the kind of oil that gets refined into gasoline.
vovap_vovap | 11 hours ago
Well, it actually is 😄 It is more expensive to do so from super heavy, but doable and some US refineries actually set up for it.
CauliflowerDaffodil | 5 hours ago
? It's exactly the kind of crude US refineries on the Gulf coast crave and are built for: https://www.theguardian.com/business/2026/jan/05/venezuelan-crude-oil-appeals-to-us-refineries
content_enjoy3r | 5 hours ago
I didn't say heavy/extra heavy sour can't be refined. I said it's not good for refining into gasoline. It's mostly refined into heating oil, asphalt, jet fuel, diesel fuel, and other petrochemicals for plastics.
Shawnj2 | 10 hours ago
It could still have general impacts on the oil market which would slightly impact gasoline
bacon-squared | 12 hours ago
The people that need to read and understand this won’t. Getting knowledge to those people is almost a lost cause. I really don’t know how to bridge the gap to where factual knowledge is generated and how to deliver it to these people that only listen to what Fox News tells them.
josejose50 | 6 hours ago
The problem here is that the article says the deal won't lower your gas prices, but then waits until the almost end to explain it's because the infrastructure needs time to be developed. There are other good reasons on why this deal may fall apart (the current government, the lack of committed private partners on the US side). By the way, I think the whole - there's no national oil company for the US like PEMEX or ARAMCO - angle is hilarious, if Trump announced that set up the NPR folks would flip out about how he was upending the free markets.
NobodyLikedThat1 | 12 hours ago
"We have no government-owned operational capability per se in the oil and gas sector," says Gerald Kepes, president of Competitive Energy Strategies, an energy consultancy in Washington, D.C. "The question is, who's going to operate on the ground?"
Really? We're going to be dumb about this? It's whichever oil company buys the most crypto TrumpCoins, Mar-A-Lago visits, and/or copies of Melania's horrible movie/book.
Hefty-Profession2185 | 12 hours ago
I'm sorry but tomorrow is Taco Tuesday. Isn't this going to be canceled tomorrow and it will all be revealed to be a ploy to manipulate the stock market?
Is this real 'real'?
InnerCorgi3536 | 8 hours ago
Tomorrow all of the big sister CEOs are invited to the WH to be told exactly what they will be required to do in Venezuela and how much money they will make after the Drumph family rake-off. Whether they do it or just drag their feet until Dipshit can be impeached remains to be seen.