I am not going to enter into the sovereignty debate—not to avoid it, but for the sake of precision: that debate does not begin here. It began when the intervention of another country was requested to solve our problems; it materialized on January 3 and continues with the control of the country’s resources in accounts under US administration. Discussing sovereignty in the context of the August 28 agreement is arriving a few years late. It is an important discussion that deserves to take place at its point of origin, but here I want to focus on the economic aspects, because political noise often drowns out what will actually determine people’s daily lives.
The first point is the most uncomfortable one: we do not know if this is a feasible project or a political campaign move. This calls for prudence because securing the tens of billions of dollars needed to launch this project is no small feat. Yet, it cannot simply be dismissed as a publicity stunt, given the evident US national and private interests—specifically, strategic reserves at historic lows and high gasoline prices ahead of an election. Meanwhile, Venezuela desperately needs oil revenues to tackle a crisis that has reached a breaking point, and the only way to do so is by attracting foreign investment as soon as possible. When incentives align this way, rhetoric can turn into reality. That remains to be seen.
No voy a entrar en el debate de soberanía, y no por evadirlo sino por precisión: ese debate no empieza aquí. Empieza cuando pidieron la intervención de otro país para resolver nuestros problemas, se materializó el 3 de enero y sigue con el control de los recursos del país en…
— Luis Vicente Leon (@luisvicenteleon) August 30, 2026
The second point is the heart of the matter: whether this is economically good or bad for Venezuela depends not on the announcement itself but on how it is implemented. The US would take 55% of the project’s actual output—partly as a shareholder and partly through the right to purchase crude at cost. Royalties are calculated based on volume, whereas the hydrocarbons tax is based on gross revenue and the income tax (ISLR) on profit. If more than half the output is handed over at cost rather than market price, reported revenue shrinks, and with it, two of the three taxes. The announced US $209 billion in tax revenue only adds up if fiscal valuation is based on international prices (a detail that may well be in the contracts we have yet to see). There is also another equally decisive factor: the definition of “cost.” When the buyer is also the majority shareholder, that definition carries as much weight as the tax rate itself. Nothing has been published yet.
Thirdly, limiting the analysis to direct revenue misses the bigger picture. An investment of this scale across 17 fields—many of them greenfield projects in the Orinoco Belt—necessitates the reconstruction of upgraders, dilution facilities, pipelines, terminals, and, above all, dedicated power generation. Such generation alters the energy landscape of the regions where these facilities are located. In its wake come services, metalworking, transport, construction, jobs, and the return of talent. There is also an often-underestimated factor: viewing the US as a partner with its own interests could shift stability perceptions for other foreign investors looking at conventional fields outside this specific project.
There is an angle that almost no one considers. Reliable, low-cost energy has become the bottleneck for technology investment; data centers and AI infrastructure require massive energy hubs that are hard to come by anywhere. A country that solves the challenge of large-scale power generation becomes a prime candidate for investments unrelated to oil. The same applies to mining and rare minerals, which rely on energy, logistics, and security for capital investment.
None of this happens overnight. Extra-heavy crude projects take five to ten years to mature, and the announced capital represents an intention rather than an actual disbursement.
There are aspects to analyze beyond politics. The starting point is harsh but real: most of our oil remains untapped underground, with no possibility of the country developing it alone. Meanwhile, in cities like Barquisimeto—to name one beyond Caracas—power outages last five or six hours a day, universities are destitute, Venezuelans’ pockets are empty, and we must provide for 17,000 people displaced by earthquakes. Carefully analyzing what lies ahead—using data rather than slogans—is the least we owe ourselves.
(Luis Vicente Leon on X @luisvicenteleon)
Translation: Orinoco Tribune
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