The first million barrels of oil from this year's US-Venezuela oil deal arrived in Texas this week, but upcoming elections in both countries could put the agreement's future at risk.
North American Blue Energy Partners is a company partly owned by the US government and led by Venezuelan businessman Alejandro Betancourt. The firm is ramping up production in Western Venezuela, deploying a sixth oil rig and announcing its fields were yielding 115,000 barrels per day.
But the challenges of working in a country where over a quarter of the population fled are starting to show. There is a shortage of skilled oil workers, and luring them back from abroad is proving difficult.
Michael McCarthy, CEO of political risk firm Caracas Wire, said: "We don't know if this contract is going to survive a change in government in the US." Democrats in the United States are skeptical of the legality of the deal and would likely investigate it if they win the upcoming midterm elections.
Venezuela's ongoing democratization process could also call the deal into question. María Corina Machado, the country's most popular political leader, recently returned after ten months in exile. She has said Betancourt would not be a viable economic partner if she were in government.
Analysis
Why This Matters
- The deal sends oil to the US, affecting energy supply and prices; any disruption could have market effects
- The agreement tests whether US-Venezuela energy cooperation can survive political change in either country
- Its collapse could reshape economic diplomacy ahead of both countries' elections
Background
The US-Venezuela oil deal was agreed this year. North American Blue Energy Partners, partly owned by the US government and led by Alejandro Betancourt, operates the fields. Venezuela has lost over a quarter of its population to emigration amid a prolonged economic crisis, creating a shortage of skilled labor that now affects production.
Key Perspectives
Donald Trump: described the first oil cargo as a "gift" delivered for free
Michael McCarthy (CEO, Caracas Wire): expressed uncertainty about the contract surviving a change in US government
US Democrats: skeptical of the deal's legality, would likely investigate if they win the midterm elections
María Corina Machado: said Betancourt would not be a viable economic partner if she were in government
What to Watch
- US midterm elections and whether Democrats win enough seats to launch an investigation into the deal
- Venezuela's democratization process and whether Machado's political rise leads to a re-examination of the agreement
- Blue Energy Partners' ability to overcome the skilled worker shortage as it continues to ramp up production
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedTrump described the oil cargo as a “gift.”Semafor: “cargo that Trump described as a “gift” delivered for free”
- SupportedMichael McCarthy said, “We don't know if this contract is going to survive a change in government in the US.”Semafor: ““we don’t know if this contract is going to survive a change in government in the US,” Michael McCarthy, CEO of political risk firm Caracas Wire, told Semafor.”
- SupportedMachado said Betancourt would not be a viable economic partner if she were in government.Semafor: “María Corina Machado, the country’s most popular political leader who recently returned after 10-month exile, has said Betancourt would not be a viable economic partner if she were in government.”
- SupportedUpcoming elections in both countries could put the deal's future at risk.Semafor: “elections in both countries could put the deal’s future at risk.”
- SupportedThe first million barrels from this year's US-Venezuela deal arrived in Texas this week.Semafor: “The first million barrels of oil to emerge from this year’s US-Venezuela deal arrived in Texas this week”
- SupportedUS Democrats are skeptical of the deal's legality.Semafor: “US Democrats are skeptical of the legality of the deal”
- SupportedDemocrats would likely investigate the deal if they win the midterms.Semafor: “and would likely investigate it if they win the midterms.”
- SupportedNorth American Blue Energy Partners is partly owned by the US government.Semafor: “For North American Blue Energy Partners, an oil company partly owned by the US government”
- SupportedNorth American Blue Energy Partners is led by Alejandro Betancourt.Semafor: “an oil company partly owned by the US government and led by the controversial Venezuelan businessman Alejandro Betancourt”
- SupportedThe company is deploying a sixth oil rig.Semafor: “The firm is deploying a sixth oil rig”
- SupportedThe company announced that its fields in Western Venezuela were yielding 115,000 barrels per day.Semafor: “it announced its fields in Western Venezuela were yielding 115,000 barrels per day.”
- SupportedVenezuela's ongoing democratization process could call the deal into question.Semafor: “Venezuela’s ongoing democratization process could also call it into question.”