The article critiques President Donald Trump’s deal with Venezuela’s leftist regime, focusing on the potential risks for American investors. The agreement includes a $200 billion oil deal over 100 years that gives the U.S. control over about 65 billion barrels of Venezuelan crude and a 35% equity stake in North American Blue Energy Partners (NABEP), a private Venezuelan firm. However, the piece argues that due to Venezuela’s history of political instability and its tendency to renege on deals once investments are made, this partnership could be disadvantageous for U.S. companies involved.
Written by the local model on 2026-09-16,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
President Donald Trump’s worldview essentially consists of dividing countries into two camps: those whose leaders flatter him or kowtow to his demands and those whose leaders balk at such subservience.
asserted
leaders → consist → subservience
In this view, dictatorships — even avowed enemies of the United States — are fine, as long as they play the game.
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they → play → game
It echoes the famous quote attributed to Franklin D. Roosevelt about Nicaragua’s military dictator, Anastasio Somoza Garcia, who ruled the country from 1936 until 1956 (when he was assassinated): “He may be a son of a b****, but he’s our son of a b****.”
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he → echo → *
True to this maxim, Trump turned his back on Venezuela’s democratic majority, led by Nobel Peace Prize winner Maria Corina Machado, and recently signed the so-called biggest oil deal in world history with leftist Delcy Rodriguez, who was put in power after the U.S. captured and removed Nicolas Maduro in January.
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U.S. → turn → January
The agreement gives the U.S. control over some 65 billion barrels of Venezuelan crude — nearly a fifth of Venezuela’s massive oil reserves.
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agreement → give → reserves
In exchange, the Venezuelan regime will receive an estimated $200 billion in royalty and tax payments during the first 25 years of the 100-year agreement, along with the investments it desperately needs to rebuild its oil industry, which was devastated under the rule of socialist-populist strongman Hugo Chavez and his successors.
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which → receive → Chavez
At the core of the deal is North American Blue Energy Partners, a private Venezuelan firm that controls 100-year concessions for 17 oil fields with proven reserves.
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that → control → reserves
The deal gives the U.S. a 35% equity stake in NABEP, the right to purchase 20% of its current and future oil output at production cost, and the right of first refusal for the remaining 80%.
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deal → give → %
NABEP allegedly plans to invest up to $100 billion in drilling operations, with U.S. and international oil companies adding billions more.
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companies → plan → billions
This may look like a win-win situation, but don’t be fooled.
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This → look → situation
Venezuela remains a dictatorship and dictatorships frequently make promises today they have strong incentives to break tomorrow, a phenomenon known to economists as the “time-inconsistency problem.”
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they → remain → problem
At this stage of the agreement — before American companies invest billions of dollars in drilling, pipelines, and extraction equipment — Venezuelan authorities have every reason to promise generous returns, favorable taxes, and decades of political stability.
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authorities → invest → stability
Those promises are intended to persuade investors to commit capital, as Chevron recently did, announcing a $7 billion investment.
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Chevron → intend → investment
After capital is on the ground, however, the incentives change.
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incentives → change → ground
A drilling operation cannot simply be moved to Texas; the capital becomes a sunk cost trapped inside Venezuela.
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capital → move → Venezuela
At that point, the Venezuelan dictatorship has an entirely different set of incentives.
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dictatorship → have → incentives
It can demand higher taxes, renegotiate contracts, impose new regulations — or seize the assets outright.
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It → demand → assets
Venezuela already knows the drill.
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Venezuela → know → drill
In the 2000s, then-dictator Chavez arbitrarily changed the rules after ExxonMobil, ConocoPhillips, and other foreign companies had invested huge sums in Venezuela’s oil industry.
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ExxonMobil → change → industry
The industry faltered under the regime’s heavy-handed interference.
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industry → falter → interference
The oil companies were awarded billions of dollars in compensation in court settlements, much of which Venezuela still has not paid.
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Venezuela → award → which
So how do societies solve the time-inconsistency problem and make credible commitments?
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societies → solve → commitments
The answer starts with protecting private property through enforceable rules and divided political power — the opposite of Venezuela’s current system, both in law and practice.
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answer → start → law
If governments want long-term investment, they must first convince investors that their property and contracts will remain protected after their money is committed.
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money → want → investors
That commitment must be embodied in constitutional rules, enforceable through democratic institutions.
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commitment → embody → institutions
If a government can be voted out, challenged in court, or blocked by another branch of government, investors are not simply trusting that the regime will remain true to its word — they are relying on a system in which the government cannot easily do the wrong thing.
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government → vote → thing
A century-long oil deal requires a century-long commitment to the rule of law.
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deal → require → law
No dictatorship can make that promise credible.
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promise → make → ?
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