In August, the Trump administration announced that it had concluded with Venezuela “the biggest oil deal in world history.” It said that, under the deal, the United States had secured “majority control of more than 65 billion barrels of proven oil reserves in Venezuela – vastly expanding our current U.S. territorial proven reserves of roughly 46 billion barrels” and that the deal “secures our energy dominance for the next century—all at zero cost to the United States.”
As Kate Brannen and Tess Bridgeman have outlined, the announced deal raises a number of significant legal and policy questions, including both questions about the terms of the deal itself and the coercive circumstances under which it was concluded. To date, the Trump administration has not provided many details that would answer them.
Getting this information from the government may prove harder than would be the case for most significant international agreements.
While U.S. law requires the executive branch to disclose to Congress and the public the texts of most significant international agreements the United States enters into with other countries, aspects of the structure of the Venezuela oil deal may mean that it is not covered by these requirements.
Should this prove to be the case, and should the administration decline to disclose the text of the deal voluntarily, Congress may need to enact legislation if it wishes for members of Congress and the public to have access to the deal’s details. Without this information, Congress will lack the ability to make necessary decisions about the deal’s implementation, U.S. energy policy, and U.S. policy toward Venezuela and the broader Western Hemisphere going forward, or to conduct meaningful oversight over the circumstances of the deal’s conclusion and their consistency with applicable law.
What Transparency Rules Usually Apply to International Agreements?
Typically, when the United States enters into important international agreements, Congress and the public can learn the full details of the agreements by examining their texts.
The Case-Zablocki Act requires the executive branch to provide to Congress the texts of all international agreements entered into by the United States with other countries, and to publish the texts of most such agreements on the State Department’s website. (The Act also includes transparency requirements applicable to some significant instruments that are not legally binding in character, but those don’t appear to be relevant here as the Venezuela deal appears to establish legal rights and obligations associated with the development of Venezuela’s oil resources).
These transparency rules cover international agreements between states that are governed by international law. The State Department’s regulations implementing the Act provide that a party to an international agreement covered by the Act “must be a state, a state agency, or an intergovernmental organization.” They further provide that the regime applies only to international agreements governed by international law, and specify that “[a]rrangements governed solely by the law of the United States, or one of the states or jurisdictions thereof, or by the law of any foreign state, are not international agreements” for the purposes of the Act. (See 22 CFR 181.2(a)(1)).
These conditions thus exclude from the regime’s scope agreements entered into with private parties and other non-state actors, and domestic law contracts not governed by international law.
Why the Regular International Agreement Transparency Rules May Not Apply to the Venezuela Deal
Statements issued by the White House summarizing the Venezuela oil deal suggest that it may fall outside the Case-Zablocki Act’s transparency regime.
First, White House statements indicate that the components of the deal may not include any agreements between the United States (including any U.S. government agencies) and the state of Venezuela.
A Sept. 2 White House statement addressing the deal says that “[t]his is a deal with a private company – not the Venezuelan interim government.” (emphasis in the original).
According to an Aug. 31 White House fact sheet, it appears that the deal is structured around a concession agreement that the Venezuelan government has entered into with a private company, North American Blue Energy Partners (NABEP), and one or more separate agreements entered into between U.S. government agencies and that same company.
- The fact sheet says that “in connection with this agreement, the Venezuelan interim authorities have granted North American Blue Energy Partners (NABEP), a privately held oil company that is the second-largest private Venezuelan oil producer and a proven operator, 100-year concessions for 17 oil fields with proven reserves of approximately 65 billion barrels.”
- The fact sheet also refers to categories of rights NABEP has granted to U.S. government agencies, including
- NABEP granting “the U.S. Department of War’s Office of Strategic Capital a 35% equity stake in its corporate parent;”
- NABEP granting “the U.S. Department of State the right to purchase, at production cost, a guaranteed 20% of the off-take from all current and future fields NABEP will operate;” and
- NABEP granting “the U.S. Department of State the right of first refusal to purchase the remaining 80% of its production.”
Second, the Sept. 2 White House statement describes the deal as being “a U.S. law contract that was negotiated with U.S. law firms and auditors.” This description, and the indication that the agreement or agreements the United States has entered into are with a private company, suggest that the deal may not be an international agreement governed by international law of the kind governed by the Case-Zablocki Act transparency regime.
These aspects of the Venezuela deal suggest that, despite the arrangements explicitly contemplating significant roles and benefits for U.S. government agencies (even including an equity stake in the private company contracting with Venezuela), the key components of the deal may fall outside the Case-Zablocki Act’s Congressional and public disclosure requirements.
Might Other Transparency Requirements Apply to the Venezuela Deal?
It also appears doubtful that disclosure of the deal’s text would be compelled by other transparency requirements that apply to the U.S. government agencies involved in the Venezuela deal.
As noted above, the Aug. 31 White House fact sheet indicates that the deal provides for the Pentagon’s Office of Strategic Capital (OSC) to receive a 35 percent equity stake in the parent company of NABEP. The statute that establishes OSC includes two reporting requirements associated with the office’s work:
- The Secretary of Defense “must notify Congressional defense committees not later than 30 days after a use of loans, loan guarantees, or technical assistance” authorized by the statute, and
- The director of the office must submit an annual report to the congressional defense committees containing a detailed summary of fees collected by the office associated with capital assistance programs it administers and a description of how those fees are allocated.
Neither of these requirements appears to involve disclosure of the texts of agreements entered into by OSC in connection with its work, and thus it seems unlikely that they would compel disclosure of the text of the Venezuela oil deal.
(Separately, DOD officials have said that OSC “cannot take any ownership stake in private companies,” so there may be additional questions as to whether the announced role for OSC in the deal is consistent with OSC’s legal authorities.)
The White House fact sheet also indicates that the deal provides for the Department of State to receive rights to purchase oil produced by NABEP. The fact sheet does not identify what component of the State Department would be responsible for making such purchases or what authorities or accounts within the State Department’s budget would be used. It doesn’t appear that the State Department currently has any existing programs that involve large-scale purchases of oil, or that there are any specific existing statutory requirements for the Department to disclose the terms of agreements it may enter into regarding the purchase of oil from private companies.
Ensuring Disclosure of the Deal’s Terms May Require New Legislation
Even if there may not be statutory obligations requiring the Trump administration to disclose the text of the Venezuelan oil deal to Congress and the public, it could choose to do so voluntarily. The administration has indicated that it views the conclusion of the deal as a significant accomplishment, and disclosure of the deal’s text could help the public appreciate what the administration has achieved. However, the administration has not disclosed the text to date, and it is unclear whether it intends to do so.
In the event the administration declines to make the text of the deal available to Congress and the public, Congress could consider passing legislation requiring it to do so. At a minimum, Congress could require the executive branch to disclose any components of the deal to which U.S. government agencies are parties. It could be more complicated to compel disclosure of components of the deal to which no U.S. government agencies are parties, which may include the concession agreement between the government of Venezuela and NABEP. To the extent, however, that the U.S. government holds an equity stake in NABEP’s parent corporation, Congress presumably could require that the U.S. government exercise its vote as a shareholder to push for the company to disclose the details of agreements it has entered into as part of the overall deal, or could consider requiring such disclosure as a condition for U.S. government agencies continuing to hold this equity stake. Congress could also consider conditioning any future U.S. assistance to the government of Venezuela on its disclosure of the components of the deal it has entered into.
Congress has previously taken action to compel disclosure of the texts of significant international instruments to which it was concerned it might not otherwise have access. For fiscal year 2021, it included provisions in both the National Defense Authorization Act (see section 1217) and the Consolidated Appropriations Act (see DIv. K, section 7044(a)(4)) requiring the executive branch to provide materials related to the 2022 Doha Agreement between the U.S. government and the Taliban, and subsequent agreements with the Taliban concerning the U.S. presence in Afghanistan or Taliban commitments concerning Afghanistan’s future. Similarly in 2015, Congress passed the Iran Nuclear Agreement Review Act to ensure it would receive the texts of any agreements with Iran relating to its nuclear program and an opportunity to review them.
If Congress wishes to pass legislation to require disclosure of the Venezuela oil deal, it will have near-term opportunities to do so. Congress is expected to take up both appropriations legislation and the National Defense Authorization Act for fiscal year 2027 before the end of this year. As was the case for legislation relating to agreements with the Taliban, either bill could be used to enact transparency requirements relating to the Venezuela oil deal.
What should such legislation contain? Aside from requiring disclosure of the deal’s terms, Congress could also consider whether additional legislative requirements may be necessary to allow it to oversee implementation of the deal over time. Possible requirements might include:
- reporting on the financial performance of OSC’s equity stake in NABEP and any subsequent transactions OSC enters into relating to that stake;
- reporting on how OSC exercises its voting power as a NABEP shareholder in any significant decisions related to NABEP’s management and operations;
- reporting on purchases of oil made by the State Department under the deal, and of any subsequent sales or transfers of such oil; and/or
- reporting on the costs incurred by either OSC or the State Department in their implementation of the deal, including costs associated with managing OSC’s equity stake in NABEP and the State Department’s costs in administering transactions in oil under the deal.
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Congress and the public clearly have a strong interest in understanding the details of “the biggest oil deal in world history.” At a minimum, Congress will need to understand the deal’s terms if it is to make decisions about appropriating funds for purchases of oil provided for under the deal, and for overseeing the management of such purchases and the allocation of oil purchased. Congress will also presumably want to understand whether there are any financial or other obligations that the United States assumes under the deal’s terms. More generally, understanding the deal’s terms will likely be important to Congress’s ability to understand the energy security posture of the United States and to make decisions about U.S. energy policy going forward.
If the Trump administration declines to disclose the terms of the Venezuela oil deal, Congress has tools available to compel it to do so.
