Venezuelan Deal Numbers

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At current WTI crude oil prices of ~$83/barrel, those reserves have a gross market value of ~$5.4 trillion.

Reports indicate the deal includes 100-year rights to develop the fields, while the US will receive 55% effective output, along with an ownership stake and rights to purchase oil at cost.

At 55%, that would correspond to ~35.8 billion barrels of effective output.

At today’s oil prices, that amount of crude alone has a gross market value of ~$3 trillion.

That said, Venezuela primarily produces heavy, sour crude, which typically trades at a meaningful discount to benchmark oil prices and requires more expensive production, blending, and refining.

Even assuming an illustrative $25-$35 of net economic value per barrel after discounts and development/operating costs, ~35.8 billion barrels could represent up to ~$1.25 trillion of cumulative economic value over the life of the fields.

This includes a $100 billion investment to develop these fields, while Venezuela estimates the projects will generate $209 billion in tax revenue for the country.

This is one of the biggest energy deals in history.

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