Trump's Oil Deal Is the Monroe Doctrine With a Term Sheet: 100-Year Rights and Beijing Locked Out

When President Trump announced a major government investment in Venezuelan oil fields on August 28, it was and was not a shock.

Ever since the raid that removed Nicolas Maduro from office (see Venezuela Promises to Be a Geopolitical Game Changer If Trump Can Convert a Triumph Into Victory – RedState), President Trump has encouraged U.S. oil companies to invest in Venezuela. He eased sanctions. He invited oil company executives to the White House.

The “how” of the investment came as a shock to just about everyone. Even though it culminated weeks of negotiations with the Venezuelan government, those negotiations were reported in the context of the U.S. government going to bat for U.S. oil companies, not as the government acting in its own right.

So when President Trump announced “majority U.S. control” of 65 billion barrels of proven reserves and Secretary of State Marco Rubio and Secretary of War Pete Hegseth were the U.S. partners, a lot of people came unglued; see Huge Deal in Process With Venezuela That Could Ensure Our Energy Security – RedState and It's Now Official: We Just Made a Monumental Oil Deal With Venezuela - It's Great for the Country – RedState.

BREAKING NEWS: The United States of America has just entered into an Agreement with the Country of Venezuela on, THE BIGGEST OIL DEAL IN WORLD HISTORY! At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured majority U.S. control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer. This Historic Transaction MORE THAN DOUBLES American Oil Reserves, greatly increases our Oil Supply, and will substantially lower Gas Prices for all Americans, long into the future, while helping to continue to set Venezuela on a course toward Tremendous Success and Great Prosperity. This Transaction will greatly strengthen the already growing relationship between Venezuela and the United States! Thank you for your attention to this groundbreaking matter. MAKE AMERICA GREAT AGAIN! President DONALD J. TRUMP

Read this part again: "At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured ⁠majority U.S. control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer."

Now that the dust has settled a bit, let’s take a look at the terms of the deal and how it is likely to play out.

Terms

This is not a classic government-to-government production-sharing contract. Trump’s team structured it as a U.S. law commercial deal with a private Venezuelan operator, after interim Venezuelan President Delcy Rodriguez government granted that operator very long field rights.

• The U.S. will partner with a privately held company called North American Blue Energy Partners (NABEP). It is operated by a Venezuelan businessman, Alejandro Betancourt. NABEP was already active in the Venezuelan oil industry, producing about 200,000 barrels per day. It is the second-largest private producer after Chevron.
• The U.S. signatories are Secretary of State Marco Rubio and Secretary of War Pete Hegseth.
• The Department of War gets a 35 percent equity stake in the joint venture.
• NABEP gets 100-year concessions on 17 oil fields with about 65 billion barrels of proven reserves (about one-fifth of Venezuela’s total; compare with 46 billion barrels of proven U.S. oil reserves).
• The Department of State is guaranteed 20 percent of production from all current and future NABEP fields at cost. It has right of first refusal on the remaining 80 percent.
• Washington retains effective control over 55 percent of the venture.
• The U.S. may veto any board appointment. A majority of directors must be U.S. citizens; all auditors and lawyers will be American, and the venture will be governed under U.S. contract law and in U.S. courts.

Venezuela’s Take

The Venezuelan government gets $100 billion in capital investment to repair the damage done to the industry under Hugo Chavez and his lackwit Mini-Me, Nicolas Maduro. It will collect about $209 billion in taxes.

Venezuela also gets jobs, a modernized oil industry, reconstruction, higher output, the removal of sanctions that allow it to sell at market rates rather than bootleg its oil at a discount, and it retains sovereignty.

Money Attracts Money

As this was happening, Chevron announced it would invest about &7 billion over five years to double its output to 600,000 barrels per day, see Chevron Expands in Venezuela Days After Big Trump Oil Deal – RedState.

##”We were trying to work at what I call Trump speed,” Energy Secretary Chris Wright said at a signing ceremony at the Miraflores Palace. “President Trump didn’t want a nudge or a slow drift in a positive direction. He wanted to see as fast as possible a transformation in Venezuela.”

Chevron, currently the only big U.S. company active in the country, plans to invest more than $7 billion there through its three joint ventures over the next five years. Wednesday’s deal would double the company’s production in the country and add two new heavy oil fields to its Petroindependencia joint venture with state-run Petróleos de Venezuela. The fields are in the Carabobo region in Venezuela’s Orinoco belt.##

But…But…

Obviously there are a lot of threads dangling on this deal. The far left and far right in Venezuela oppose the deal because the evil Yanquis and the even more demonic Trump are involved. Likewise, the deal is not popular with our own left or the CATO people.

The overarching concern is Venezuela’s political stability. How will the eventual replacement of Delcy Rodriguez play out? Will the process involve guns? I think if the Trump venture produces jobs and revenue and can avoid the corruption of Venezuela’s national oil company, which served as a “piggy bank” for the buddies of Chavez and Maduro, the domestic heartburn may go away.

The oil deal will prop up Ms. Rodríguez, at least in the short term, and that may be part of Mr. Trump’s motivation. She has courted the President to survive in power and to stave off demands from the opposition to establish a process for new elections. Mr. Trump likes nothing better than a leader, elected or not, who bends to his wishes.

It’s notable that both the Venezuelan opposition and Ms. Rodríguez’s left-wing allies are criticizing the deal. The Bolivarian left views it as a concession to North American imperialism, and it will play that nationalist card if there is another election.

In the U.S., the concern is not only what happens in 2028, but also that the U.S. has created a local company with the U.S. government as a partner that may have more clout than other U.S. oil companies.

“No one wants to go down there and take over a mess and then get blamed for the mess,” said Shad Frazier, a consultant and former oil executive at Apache in Houston. “The worry is, when you have a change in U.S. administration in two years, what happens then? No one likes to invest into chaos.”

The U.S. oil industry has long opposed government intervention in the fossil-fuel business—and some executives are worried Trump’s first venture into state capitalism in the industry could create a giant with the ability to push them around.

There is also concern about the legal basis for the Department of War to hold an equity stake in a business venture and to receive a revenue stream that is independent of Congressional appropriations.

China Isn’t Happy

Of the 17 oil fields covered in the Trump deal, five are currently controlled by Chinese entities, and one is controlled by Russia.

China, in particular, is not happy. Here is China’s foreign minister losing his crap over the deal.

🇨🇳🇻🇪 China's FM declared that its cooperation with Venezuela is protected under international law and the laws of both nations, insisting it doesn't target any third party.

Beijing warned that its "lawful rights and interests" in Venezuela must be protected and should not face…

— NewsForce (@Newsforce) September 3, 2026

China-Venezuela cooperation is protected by international law and laws of both countries. The cooperation does not concern any third party and should not be subjected to interference by any third party. China’s lawful rights and interests in Venezuela must be protected.

What’s his beef, other than Trump tossing China out of yet another Latin American nation?

The method of Chinese investment throughout the undeveloped world is called an “offtake agreement.” This is how it works:

The blueprint links three elements: a Chinese policy bank to loan the money, a commodity purchase contract requiring the borrower to sell commodities (sometimes at a pre-agreed price or quantity) to a purchaser in China, and a repayment channel that directs commodity sale proceeds toward debt service. This structure allows the borrowing government to mobilize large capital infusions across multiple sectors while relying on a single revenue stream for repayment. Beijing, in turn, secures preferential access to the energy supplies it is scouring the globe to obtain.

In the case of Venezuela, China Development Bank, the world’s largest development finance institution, financed the loans. The commodity purchase contract involved Venezuela's state-owned oil company Petróleos de Venezuela, S.A. (PdVSA) and a Chinese state-owned commodity purchaser. And the repayment channel was the proceeds from PdVSA’s revenue stream from oil sales.

So the oil fields that now belong to the U.S.-NABEP venture have their future production pledged to China to repay loans that are now in a Grand Cayman bank account belonging to someone in the Chavez-Maduro circle. If Venezuela says, “that was then, this is now,” it will be China experiencing the reality of being the payday lender of international finance.

This is how the White House fact sheet on the issue deals with the subject:

REASSERTING THE MONROE DOCTRINE & EXPELLING FOREIGN ADVERSARIES FROM OUR HEMISPHERE: The majority of the incremental oil fields to be operated by NABEP were previously controlled or operated by Russian and Chinese firms, or by corrupt cronies of Maduro and Chavez. These malign foreign actors looted Venezuela’s resources for the benefit of American adversaries like Cuba, Russia and China and failed to invest in Venezuela’s infrastructure or development.

• President Trump has re-established the Monroe Doctrine, purging foreign malign influence from our backyard and ensuring American dominance in our hemisphere is never again questioned.
• By working with both new and old partners, President Trump’s Administration is forging new robust, strategic and defensible supply chains in our hemisphere to support the revitalization of our manufacturing and energy sectors after years of globalist decline.

If Trump holds this line, the long-term future of the deal pales in comparison to breaking this off in China.

Outlook

This could go very well or not. Strategically, if this model frees up capital for development in Venezuela, it will be seen as the boss move of all time. It has the potential to crush the political fringes that have dominated Venezuelan politics for years. It tosses Russia and China out of the country and reduces their ability to sow mischief.

The downside is that the oversight will be weak and money will be siphoned off to create a new group of oligarchs. American politics is notoriously short-sighted, and I have no doubt that if a Democrat ends up in the White House after the 2028 election, this venture will be destroyed. Out of spite, if for no other reason.

Editor’s Note: Thanks to President Trump and his administration’s bold leadership, we are once again respected on the world stage, and our enemies are being put on notice.

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