Korva is a scroll of the internet’s best ideas.
The oil deal
The reserves were once controlled by Russian, Chinese, and Maduro entities. The US government controls 55% of the deal: the Pentagon gets 35% equity, and the State Department gets the right to buy 20% of output at cost. Rubio and Hegseth signed it with Venezuela's interim president, Rodríguez, who took over after the US military captured Nicolás Maduro in January.
Investment and other deals
Blue Energy Partners has pledged roughly $100 billion in new infrastructure, and Chevron and several unnamed companies are also in line for deals. Trump said the deal will come at no cost to the American taxpayer.
Machado's objection
María Corina Machado, a former presidential candidate in Venezuela who had been viewed as an American ally, came out against it. She said the current Venezuelan government does not have the authority to make this energy deal with the United States.
Why did Venezuela's oil output fall?
Venezuela produced about three million barrels a day in the 2000s. After a 2002 to 2003 strike at the state oil company PDVSA, the government dismissed roughly 18,000 employees, many of them engineers and managers. Years of underinvestment, aging equipment, and later sanctions cut output further. By 2020, production had dropped below one million barrels a day, according to OPEC figures.
Why is Orinoco crude hard to move?
Crude from the Orinoco Belt is extra heavy, with a density near that of water and a thick, tar-like consistency. It will not flow through standard pipelines at normal temperatures. Producers typically blend it with lighter hydrocarbons called diluent, heat it, or run it through upgraders that convert it into lighter synthetic crude. The U.S. Geological Survey estimated in 2009 that about 513 billion barrels in the Orinoco Belt are technically recoverable.
How did Venezuela's oil industry become state-run?
Venezuela nationalized its oil industry effective January 1, 1976, and created Petroleos de Venezuela, known as PDVSA, to run it. Before that, foreign companies operated under long-term concessions. The country partly reopened to foreign investment in the 1990s. In 2007 the government required foreign companies in the Orinoco Belt to accept minority stakes in joint ventures.
More from All-In with Chamath, Jason, Sacks & Friedberg
