**A U.S.-Venezuela Oil Deal Was Signed in Secret — And It Won’t Fix What’s Actually Broken**
A U.S.-Venezuela oil deal has been announced by President Trump and Interim President Delcy RodrĂguez, yet the public knows virtually nothing about the terms of the agreement — and neither do many of those closest to the negotiations. The deal was apparently reached in secrecy, without public debate, and signed under duress, raising serious questions about its legitimacy and legality. The announcement caught not only the author — a Special Adviser to Venezuelan Congressman Antonio Ecarri on Economic, Monetary, and Energy Affairs — but virtually everyone in Caracas by surprise. While the geopolitical significance of a U.S.-Venezuela energy agreement cannot be overstated, the real story is not the deal itself, but the deeper structural crisis in Venezuela’s oil industry that no agreement can paper over.
At the heart of that crisis is PDVSA, the state-owned oil company that dominates Venezuela’s economy and accounts for roughly 95% of the country’s foreign exchange earnings. Even by the standards of state-owned enterprises, PDVSA is grossly mismanaged. Under Luis Giusti’s direction from 1994 to 1998, production soared — but that trend reversed after Hugo Chávez took power in 1999 and introduced Chavismo as Venezuela’s guiding economic doctrine. Output stagnated, then collapsed after the April 2002 coup attempt, when Chávez purged PDVSA’s professionals en masse and replaced them with loyalists. A temporary recovery followed, but production plunged again after Nicolás Maduro assumed the presidency in 2013. The result: Venezuela’s oil output today is drastically lower than when Chávez took power in 1999, with both physical and human capital deteriorating rapidly — including Maduro’s 2017 appointment of a National Guard general with no industry experience to lead PDVSA.
**Why Venezuela’s Oil Reserves Are Effectively Worthless Today**
Crucially, PDVSA’s declining output is not due to dwindling oil reserves. It is caused by the rate at which those reserves are being depleted — and that rate holds the key to understanding the economics of any oil company. Venezuela’s depletion rate has fallen rapidly since 2007 and now sits at just 0.124% per year, meaning it would take 558 years for PDVSA’s reserves to be halfway depleted. Because of positive time preference and discounting, a barrel of oil that won’t be produced and sold for 558 years is virtually worthless in today’s dollars. By contrast, Exxon depletes its reserves at close to 9% per year — implying a 7.4-year half-life. This gap explains why Venezuela’s vast reserves carry no positive present value: the problem is not the oil underground, but the absence of clear private property rights and the capital, incentives, and efficiency that come with them.
The author speaks from experience: as a member of the United Arab Emirates’ Financial Advisory Council from 2008 to 2014, he used a simple model to conclude that the UAE should deplete its reserves far more rapidly — advice to „take the money and run,” which the UAE ultimately embraced, eventually exiting OPEC in May 2026 after failing to secure a quota increase. Venezuela should follow a similar path, but with deeper reforms first: kill inflation by mothballing the bolĂvar, replacing it with the U.S. dollar, and then employ all legitimate means to privatize the oil industry and dramatically increase production. Only a confidence shock of that magnitude — paired with genuine private property rights — can give Venezuela’s oil reserves a positive present value and rescue an economy that secrecy and state control have brought to the brink.
Ez a cikk a Neural News AI (V1) verziójával készült.
Forrás: https://www.yahoo.com/news/politics/articles/m-working-venezuela-kill-inflation-110000289.html.