Whose Deal Is It? Gas, Sovereign Risk, and the New American Statecraft

This article examines the US–Venezuela energy settlement as a new model of American economic statecraft, exchanging security sponsorship for equity and access. It argues that its durability will depend on overcoming sovereign risk, attracting private capital and giving Venezuelans a domestic stake through gas-led energy reconstruction.

Two years of sanctions, expropriations and collapsing output did not push Eni out of Venezuela. Through it all, the company kept crews, stakes and unpaid invoices in the ground. Most recently some $6 billion in gas payments Caracas still owes it, recovered so far mostly in indifference. On September 2, in Caracas, that continuity paid off: Eni signed for exclusive exploration rights over Junín-5, a 35-billion-barrel heavy-oil field in the Orinoco Belt, alongside a $7 billion commitment from Chevron to double output at Carabobo, and a deal for GE Vernova to help rebuild the grid. The ceremony was overseen not by Rome or Brussels but by Venezuela’s acting president Delcy Rodríguez and US Energy Secretary Chris Wright, a reminder, beforeanything else, of whose deal this actually is.

That specificity matters, because when Washington unveiled the broader framework in late August, what Donald Trump called “the biggest oil deal in world history”, the coverage went almost entirely to the headline structure. What it left underexamined is harder and, we think, more consequential. Is this arrangement a template: a new model of American economic statecraft, in which Washington converts a security relationship directly into equity, offtake and access rather than aid or alliance-building? Will the concessions survive Venezuela’s own constitution and the volatility of Caracas politics? And will private capital treat US geopolitical sponsorship as sufficient protection against a sovereign-risk problem that has burned American companies here before?

Those are the questions worth answering, and Eni’s arrival this week as a working partner inside an American-built structure (not the leader of a European counter-project ) is as good a place as any to start our account of the deal.

The American Terms, Briefly

The headline structure has been reported everywhere, so it needs only a summary.

The deal was struck not through the Department of Energy but by Secretary of State Marco Rubio and Defense Secretary Pete Hegseth, with Rodríguez. This is a security channel, which tells you how Washington sees the asset. The vehicle is North American Blue Energy Partners (NABEP), controlled by the Venezuelan businessman Alejandro Betancourt, granted rights over 17 fields holding some 65 billion barrels. Much of it acreage have been previously worked by Chinese and Russian firms.  The US government takes a 35% stake, reported as a Pentagon holding, with board veto power, the right to buy 20% of output at cost, and first refusal on the rest. Washington pays nothing for the equity. The roughly $100 billion in new investment falls to NABEP and to the operators building around it. For the White House it is strategic access without strategic outlay, with Gulf Coast refineries and a depleted Strategic Petroleum Reserve as the logic on the oil side.

This week’s Chevron and Eni signings are a separate, bilateral layer on top of that structure (existing joint ventures expanded rather than new NABEP grants) but they read as the same instrument at work: American sponsorship converting into commercial commitments on the ground within days of the framework’sannouncement. Yet these conditions obscure more than they reveal.

Why the Terms Are the More Evident Part

Three caveats sit underneath the numbers. The first is physical: after years of disinvestment the fields are not ready. Much of the acreage is greenfield that will take the better part of a decade to bring on line, and the brownfield assets need years and billions before they yield. On that timeline Canada, mature, integrated, already flowing to the US, is far ahead and will stay there.

The second is legal, and potentially fatal: Venezuela’s constitution prohibits ceding or leasing the nation’s reserves to foreign states. And this keeps PDVSA (Petróleos de Venezuela, S.A. — Venezuela's state-owned oil and natural gas company, founded in 1976) in state hands, although the recently promulgated Ley de Hidrocarburos has allowed for greater private participation in operating and production contracts.

The third governs the others: payment. Foreign currency reserves are exhausted in Venezuela, PDVSA is undercapitalised, and the bolívar buys nothing. The deal answers this by paying foreign operators in crude rather than cash, the same barter logic that already governs Eni’s presence. The $6 billion Eni is still owed is that payment problem made concrete, a warning to anyone reading the $100 billion as money that simply appears because a contract has stated so.

All of which points to the real question: what makes the current deal last?

A Lease on Political Weather

As it stands, the entire structure runs on US licences, and that is true for the American flagship operator as much as anyone else.

Chevron’s own authorisation was revoked by Washington in early 2025 and only restored months later; Eni operates under General Licence 50, one of several instruments naming a handful of firms cleared to work in Venezuela’s oil and gas sector while Russian and Chinese companies are excluded outright. A company needs that permission because US sanctions reach any transaction that clears in dollars, touches the American banking system, or relies on US technology, which is to say almost any oil transaction taking place anywhere. The licences carry no expiry date, but OFAC can amend, narrow or revoke them at any time, and Washington has already shown, more than once, that it will. A deal built on a revocable administrative permission, issued on one government’s foreign-policy timetable, isnot a settlement. It is a lease on political weather. Change the weather, or change the calculus in Caracas, and the whole edifice is exposed to exactly the constitutional and contractual disputes the documents have so far failed to foreclose.

Repsol is the clean illustration of how uneven this can get even among licensed operators. Unlike Eni, it was not partof this week’s Caracas signings. Its own memorandum with PDVSA, new area near Lake Maracaibo, alongside feasibility work on offshore gas, dates to June and remains at the assessment stage; talks aimed at moving it toward production have stalled in Washington. Same licence regime, same sponsor, different pace — which is the point. The weather does not move at the same speed for everyone under the sun.

That contestation is not confined to Washington’s side of the ledger. Inside Caracas, it is being argued in exactly these terms. Iris Varela, a National Assembly deputy from the ruling PSUV (Chavez’s and Maduro’s party), has publicly invoked Article 339 of Venezuela’s constitution (which allows the National Executive or the Assembly to revoke a concession “when the causes that motivated it cease”) to argue the September agreements were signed under duress, while Maduro was in US custody, and it could be annulled once that duress lifts, exposing the contracting companies to future nullification and compensation claims. That the revocability argument is being made publicly by a sitting PSUV legislator, and not only by outside sceptics, is itself evidence for the point: the licence is only as durable as the domestic consensus behind it, and that consensus does not yet exist.

What would actually make this deal durable lies in a direction the licence terms do not address on their own: the gas.

The Gas Nobody is Counting

Over 90% of Venezuela’s gas is “associated gas”, a byproduct of pumping crude. Most of what is flared comes from the mature fields of the east and the Orinoco Belt. The worst of it is in northern Monagas, where PDVSA flares morethan half the gas the state produces; enough on its own to rank among the largest single flaring sources in the world.Crucially, the operators of that worst-flaring acreage are precisely the Chinese and Russian joint ventures the new deal is designed to displace. The Petromonagas field is held by PDVSA with a Russian partner, and Sinovensa, held with China’s CNPC. It sits in the Orinoco blocks and it is changing hands as we speak. Capturing that gas is the remediation of exactly the fields the deal transfers, and it aligns with the arrangement’s own stated logic of evicting Beijing and Moscow from the hemisphere.

If directed inward, that gas could power the grid, restart industry, and rebuild the refining base, arguably the physical precondition for the oil deal to mean anything at all to the Venezuelan people. The split is close to clean: oil moves north, toward Gulf Coast refineries and the Strategic Petroleum Reserve, because that is the American economic and strategic return on the deal. Gas stays home, because Venezuela’s is the only economy small and broken enough that a few billion dollars of midstream investment can visibly change how it functions, and that is the primary Venezuelan political return that makes the arrangement worth defending in Caracas rather than merely enduring. The economics confirm the logic: below a gas price of roughly $4.50 per thousand cubic feet, capturing and selling the gas does not pay for itself at any level of investment, which is exactly why it is flared today. The justification for the spend is not export margin but the value of delivered energy to a collapsed grid, and the avoided waste of a resource currently set alight.

Nation-building gas for Venezuelan domestic development, before a molecule is exported, would give the arrangement something no clause in it can supply on its own: a population with a stake in its survival. A deal that keeps the lights on is far harder for any successor government in Caracas to tear up than a deal that only ships crudenorthward. That domestic stake is not a legal guarantee, which the constitution withholds, it is a political one. And it is the strongest source of durability the arrangement has.

The cost of doing it is real but bounded, and it separates into three layers. Stopping the flare at the wellhead is cheap: a compression-and-treatment skid runs in the low hundreds of thousands of dollars per site, a rounding error againsta $100 billion programme. The expensive layer is the midstream between the wellhead and any onshore processing station. The gathering lines, compressor stations and treatment plants that dried and moved the gas before they, too, decayed. Rebuilding that network across a petro-state’s fields is a low-tens-of-billions undertaking on the available modelling; a meaningful slice of, not a footnote to, the headline investment. It is precisely the kind of capital programme that needs a financing vehicle and, more than anything else, confidence that the title behind it will hold.

From Lease to Balance-Sheet Asset

That confidence is the real test of the American model, and it is being priced right now. Chevron’s $7 billion commitment this week, development rights across Carabobo-1 and Carabobo-2-South-A, a plan to more thandouble output toward 600,000 barrels a day. Such is the clearest statement yet that a US operator regards Washington’s security sponsorship as bankable. Chevron has operated in Venezuela continuously since 1923 and is the only major US oil company doing so today at any scale.

Exxon and ConocoPhillips are the contrast. Both have stayed out of the reopening despite encouragement from the Trump administration. Both are still pursuing restitution for assets Hugo Chávez nationalised without compensation in 2007. Their hesitation is not a verdict on the politics of the deal; it is a verdict on the specific promise at its centre: that a security guarantee from Washington is worth more, to a board setting capital budgets, than an arbitration claim against a government that has expropriated American assets before and retains the constitutional means to do so again. Chevron has bet that it is. Exxon and Conoco, for now, have not. Concessionary geopolitics, access granted through a security relationship rather than earned through a commercial bid, only becomes a durable balance-sheet asset once enough capital makes Chevron’s bet rather than theirs. That is not yet settled, and it will not be settled by press conferences in Caracas.

What China Loses, and What It Can Still Do About It

Six of the reassigned NABEP contracts were previously operated by Chinese or Russian firms, five Chinese, one Russian, among them Petromonagas and Sinovensa. Beijing’s Foreign Ministry has formally objected, saying China’s “legitimate rights and interests” in Venezuela must be safeguarded, and has raised the question of compensation without yet announcing retaliation or legal action.

The 2024 China–Venezuela bilateral investment treaty, itself a somewhat controversial instrument when Caracas ratified it, gives Beijing a real, if narrow, lever. Chinese investors harmed by Venezuelan state action can, after a negotiation period, take the dispute to UNCITRAL arbitration. Whether that clause actually reaches these five fieldsturns on a fact that is not yet public, whether Chinese state firms held equity in them, as opposed to lending or offtake positions, which is what China’s decades of Venezuela financing has mostly consisted of. There is no evidence so far that they did hold equity. Absent that, Beijing’s leverage here is diplomatic rather than legal: raising the expropriation question, not litigating it. A UNCITRAL case China could plausibly lose would carry its own cost, a reputational one, for a government that markets itself internationally, including at the UN, as a defender of the rule of law in disputes with Washington. Beijing’s more durable leverage lies elsewhere, in the roughly $10–20 billion in oil-backed debt Venezuela still owes it, secured collateral that gives China a seat, if it wants one, at any future restructuring, and clouded title until it gets it.

Russia’s position is thinner still. Rosneft formally exited Venezuela in 2020 under US sanctions pressure, folding its stake into a state successor entity, and Moscow’s posture toward Caracas has been reactive rather than assertive ever since. That fits a broader pattern: Russia’s position in Syria has been sharply reduced since Assad’s fall, and across both theatres Moscow looks less like a committed patron than a power reordering its overseas commitments around what it can still afford to hold. Neither Moscow nor Beijing is positioned to contest this deal directly. The open question is not whether they can stop it, but what leverage they retain to shape its terms from the outside: debt in China’s case, residual goodwill in Russia’s.

The Wider Pattern

None of this is happening in isolation. China’s push into Latin American infrastructure and energy, ports,transmission grids, mining and power projects across the region, has been the more patient. And, in places, more effective form of competition with Washington, running well ahead of anything Beijing has attempted commercially in Venezuela’s oil sector specifically.

Seen against that backdrop, the Venezuela deal reads less as a one-off transaction and more as a marker: Washington is comfortable with ordinary trade continuing, but treats Chinese involvement in energy and infrastructure across itsown hemisphere as a strategic line it intends to hold, not merely in Caracas but wherever the same contest recurs; Havana, Tehran, and the smaller capitals in between. That is the throughline connecting Venezuela to the administration’s wider posture: less a doctrine of nation-building than one of denial, executed hemisphere by hemisphere, sector by sector, in support of the broader security agenda this White House has set for itself. That may have happened until today. The jury is still out on that.

Two Ways This May Fail

Honesty about the arrangement requires naming the conditions under which it may not work, because both are live.

The first is Caracas itself. The constitutional bar on ceding reserves has not been repealed, only worked around through operating and production contracts under the Ley de Hidrocarburos (approved last Jan. 2026). In addition, Venezuelan politics remains genuinely unsettled after Maduro’s removal. A license-based structure, by definition, survives only as long as the government issuing the licenses and the government hosting them both want it to. Any serious rupture in Caracas (a court ruling, a succession fight, a change in who actually controls PDVSA’s signature) exposes the deal to the exact dispute the documents have not foreclosed. This is not a marginal risk. It is the base case the entire structure is built against. Delcy Rodríguez has sold the arrangement domestically on the promise of $209 billion in revenue over 25 years, and the government’s own base, the PSUV-controlled National Assembly and the military leadership, has endorsed it on those terms. The reception outside that base has been considerably rockier than the number suggests. Rafael Ramírez and Manuel Quevedo, both former oil ministers and PDVSA presidents from within chavismo itself, have denounced the deal as “entreguismo” (from entregar, in Spanish to give away), namely a giveaway of national patrimony. Ricardo Hausmann, a Venezuelan economist at Harvard University, has put the market-facing version of the same doubt more bluntly, saying Venezuelans have lost confidence in Marco Rubio, whom they see as the main Latin American strategist in Washington. Both camps are, in effect, invoking the same history: Caracas has renegotiated or repudiated foreign energy arrangements before, from the Gold Reserve arbitration to the uncompensated 2007 nationalisation of Exxon’s assets, and nothing in the current structure forecloses a repeat. A revenue projection is not a guarantee, and the gap between Rodríguez’s number and the domestic reception it is meeting is exactly why a fiscal argument alone will not settle the question.

The second is China, acting not as litigant but as creditor. A clean restructuring of Venezuela’s debt is what ultimately unlocks the capital this deal needs beyond its first tranche; no investor commits tens of billions to gas midstream or Orinoco brownfield work without clear title, and title is not clear while a collateralized creditor holding $10–20 billion withholds consent. China need not contest the deal in any tribunal to blunt it. It need only decline to settle, leaving the collateral clouded and the next phase of investment harder to close.

Neither objection defeats the claim that the deal, as signed, still lacks a guarantee in the terms themselves — that much stands on its own. What would raise the odds is specific: a resolution, one way or another, of Venezuela’s constitutional bar; a debt settlement that brings China inside the restructuring rather than leaving it outside with a veto; and enough capital following Chevron’s bet, rather than Exxon’s caution, that the security relationship starts to look to markets like the asset Washington intends it to be.

The biggest deal in the world, for now, rests on a license that can be revoked and a constitution that may forbid it. Its durability will come from elsewhere: from gas turned homeward, giving Venezuelans a stake worth defending; from capital deciding that American sponsorship is worth pricing as protection rather than as headline risk; and from a government in Caracas that survives long enough, and stays cooperative enough, for either to matter. The guarantee is not in the terms. It is in whether Washington’s model, security exchanged for equity, access bought with protection rather than cash, turns out to be one that outside capital and the Venezuelan public, are actually willing to bet on.

John S. Wyse is the Scientific Director of Italia Atlantica. He is researcher in cognitive linguistics and strategic communication, Department Director at the European School of Economics, and a professor at GEMA Business School. His research focuses on the impact of figurative language and cognitive frames on highly strategic decision-making processes, with a particular emphasis on the role of communication in international politics, leadership, and negotiation.

Photo by Zbynek Burival on Unsplash