No. of Recommendations: 3
I read some takes on this as us ripping them off. Hardly.
Let's go to the videotape:
thehill.com - Venezuela US oil deal“This 25-year bilateral project envisages the development of 17 strategic oilfields with a production target of more than 1.5 million barrels per day,” Rodríguez said on state TV outlet VTV in a late-night address. “That figure relates solely to the bilateral agreement between Venezuela and the United States.”
Rodríguez hailed the deal as “historic,” adding that it will revive Venezuela’s economy and increase government revenue.
“The agreement is based on a very simple premise,” she said. “Each party contributes what it does best. Venezuela contributes oil, its industry and the experience of its workers accumulated over more than 100 years. The United States contributes the capital and technology needed to recover and develop those assets.”1.5M bbl/day is roughly double where they are now, FYI.
So:
-Venezuelan workers work the fields, Venezuela gets paid
-The US supplies the capital to re-hab the fields and bring them up to speed. US firms get paid to bring equipment down.
Rodríguez added that in return, “Venezuela receives production, jobs, investment in infrastructure, increased revenue for the government and productive linkages for domestic industry.”
The deal establishes $19 going to Venezuela for each barrel of oil produced and sold to the U.S., generating an estimated $209 billion a year to the South American country, she said. The benchmark price per barrel is $65, which she said could fluctuate based on global prices.The proper way to think about the $19 is that it's roughly a 30% tax on the sale of a barrel of oil. Whatever company that's extracting the oil is getting the rest (from which proceeds they use to pay the workers and other costs).
