How viable is Trump’s oil deal with Venezuela?

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0:32Good morning from the Financial Times. Today is Tuesday, September 1st, and this is your FT News Briefing. Wall Street isn't happy about big laws, big fees, and Donald Trump's oil deal with Venezuela faces a lot of hurdles. Plus, why doesn't London's Underground have full mobile coverage yet? I'm Sonia Hudson in for Mark Filipino, know, and here's the news you need to start your day.

1:07Wall Street banks are pushing big law firms to cut their fees. Why? Well, you guessed it, AI. The banks are some of big law's most important clients, and they argue that the decades-old economic model isn't sustainable in an era of artificial intelligence. Law firms typically bill hourly for work that's done by an army of junior lawyers, often late into the night. That involves things like research and reviewing documents, stuff that AI can now do more quickly. Morgan Stanley and Citigroup have told major law firms they want to set up new payment arrangements that would save them money. That's what the bank's in-house lawyers told the FT.

1:50And Goldman Sachs asked law firms how much the technology was saving them. The bank said it expected to enjoy those perks, too. That's according to two people with knowledge of the matter. Goldman Sachs declined to comment. We may already be seeing the impact of the technology, though. According to a survey by Citi, almost half of large law firms said AI had affected their pricing model.

2:19Analysts are skeptical about U.S. President Donald Trump's unusual oil deal with Venezuela. Over the weekend, Trump announced a joint venture where the U.S. government will take a stake in a private Venezuelan oil company. That venture will develop infrastructure in the country and give the U.S. control over 65 billion barrels of Venezuelan crude. I'm joined now by the FT's U.S. Energy editor, Jamie Smith, to talk about how this could actually all play out. Hi, Jamie. Hello, Sonia. So why did Trump strike this deal with Caracas? I think really behind the scenes, President Trump talked about lowering energy prices for Americans.

3:01He talked about how this was, you know, gaining access to Venezuelan oil reserves. But really what this deal is about is that the Trump administration is really disappointed that few oil groups have agreed to come in and commit the capital that's needed to really develop Venezuelan assets, which are very dilapidated. And since this deal was announced on Friday, there's been an ominous silence from the major U.S. companies that invested in Venezuela previously. They have not commented on whether they're not interested in going back into Venezuela. You mentioned that one of Trump's goals is to lower gas prices for Americans.

3:43How reasonable is that, according to the analysts that you've spoken to? Analysts have said this is really going to be quite challenging, particularly in the short term. You know, it could take 10 years and cost$100 billion to actually get the production going in Venezuela. So any reduction in the price, it's really going to be in the longer term. OK, so we could potentially not even see the impact of this on gas prices until after the end of Trump's second term. What other challenges exist? I think really, you know, there's political risks inherent in this type of an arrangement. Saying that the U.S.

4:26is going to control 65 billion barrels of proven Venezuelan reserves is likely to raise heckles in Venezuela. We've already seen the opposition raising questions about this deal. And so some of the analysts that we've been speaking to have been saying that there is a risk that this could weaken the position of Delcey Rodriguez, the interim president in Venezuela, who's been a key partner for the Trump administration. There's also risks on the Washington side of things, because, of course, you know, senior Democrats immediately came out and slammed this deal. Now, if the party wins the midterms, then we're likely to see tougher scrutiny of deals like this in Congress.

5:06And of course, if they win the presidency, then in a couple of years time, you could see an agreement like this ripped up altogether. There's also quite a bit of controversy around the man at the head of the company whose reserves the U.S. is taking over. His name's Alejandro Betancourt. Tell me more about him. That's right. We have this interesting partner for the US government, Betancourt. He actually is the second largest producer of oil in Venezuela. In one sense, he's the perfect partner. But just a few months ago, he was fighting extradition in Europe on money laundering allegations. Now, his spokespeople say that they have no validity whatsoever.

5:48But, you know, companies will want to know that anyone that they're getting involved with in a deal like this, you know, doesn't come with legal issues or controversies hanging over them. Jamie, what do you think the Trump administration or Betancourt need to do to soothe any worries that investors may have? I think definitely the oil sector would like to see the text of an agreement so they can make a decision on whether they want to actually invest in Venezuela. Oil companies want to invest with as little risk as possible and the highest rewards as possible. Now, there are lots of other places in the world that they can invest their capital and possibly get a higher return.

6:31And that's really one of the challenges that Venezuela will face. Jamie Smith is the FT's U.S. Energy Editor. Thanks, Jamie. Thank you.

6:45It's back to work today in London after the summer bank holiday, and millions of people will commute on the underground. But unlike elsewhere in Europe, the tube has had a particular problem. Big parts of its network have had no mobile phone signal. Now that is set to change. Transport for London, the body that runs the tube, has promised that each of the network's 121 subterranean stations will have 4G or 5G coverage by the end of the year. Mark Filippino sat down with the FT's tech and telecoms correspondent Kieran Smith earlier this summer to learn more. So, Kieran, why doesn't the tube have signal?

7:28The simple answer is that the tube was built a very long time ago. We're talking over 100 years. and that means that it simply wasn't fitted with any mobile equipment, even wasn't fitted with mobile equipment on the newer lines. So it's all had to be retrofitted. And the challenge that comes with that is the tube tunnels are really small, which means that it's very hard to get equipment in and the workers have a very finite time to do it because trains run until midnight or one in the morning and start again at five. So not only are the tunnels very old, but also there's not a huge amount of time to actually do the work to install the equipment needed to give us phone signal.

8:01But Kieran, there are a lot of stations that have been built more than 100 years ago that do have access to Wi-Fi and signal. Why has London taken so long to get up to speed? Well, London's been a bit slow taking up the challenge on this one. Paris had full 4G coverage by 2020 and Berlin had the same by 2024. London only got going in 2021 when Transport for London signed a contract with Bolden Networks, a technology provider, to roll out mobile coverage over the tube. Now, that was meant to be done by 2024. However, the terms of the contract were changed midway through so that London wouldn't just have 4G coverage by then.

8:39It would actually have 5G coverage and subsequently the ability to upgrade to 6G when that becomes available. Now, that's pushed the completion date back to the end of this year, so 2026. And you got to see some of this work firsthand, didn't you? You went down into the Tube network recently with Transport for London. I did, yes. I went down with Transport for London and Bolden Networks. Now, what I went down to see was how Bolden's technology connects into the tunnels and the tube stations from these nine base station hotels that they have around the centre of London. They're effectively a form of data centre where all the different technology comes in, which connects to the mobile network operators technology and then is wired down into the tunnels to individual stations.

9:22This is where it comes. This is the first cabinet on the station. stepping into a dark closet-like room here. And we've got one sort of six foot, slightly over six foot cabinet here, whereas in the base station hotel, we were looking at dozens of them. Kieran, he said cabinets a couple of times there. What does that mean? Yes, and they're little metal boxes that you see at street level, but they contain telecoms equipment. But the bigger ones here, which are often in cupboards or disused tunnels in the tube system, contain the 4 and 5G antenna that actually send signal through the tube into the stations, that its commuters see every day, as well as the tunnels.

10:00So, Kieran, you're in an abandoned tunnel in a secret part of a tube station? That's incredible. Exactly, yeah. We're now walking into this abandoned tube tunnel because it's still in use, but just not for its original purposes. Angel Station was expanded, and now there's this big gap between the two platforms, which is home to, well, among things, mobile equipment. the abandoned tunnel is still connected to the modern day tunnel which means that when a north bound train comes up from old street the city of london we're looking right at it so what we feels like we've got is a train coming straight towards us and you can hear the wind rush now but right about now it's going to peel left so it's about 20 meters in front of us but instead of coming from it's over it's just gone left and onto the platform and uh i'm not gonna lie to you mark it was um not the not the experience i expected to have that tuesday morning you're a braver man than i am kieran um why does it even matter that there's signal in the tube why is this such a big deal well i think there's a few things here mark because firstly anecdotally you look at commuters how frustrating is it when you get on the tube and you can't have any phone soon you You can't send the email that you're about to send.

11:15You can't continue that phone call that was really important because you're in a rush. But also on a wider note, this is important for safety. Transport for London was saying that they now use this additional signal to improve safety features on their trains, meaning they can more actively track them. And when there's a problem, they're more able to go and address that more quickly. So I can check my sports scores and I can feel a little bit safer on my ride. Is that right? Yes, that is correct. Fantastic. Kieran Smith is the FT's tech and telecoms correspondent. Thanks so much for this, Kieran.

11:44Always a pleasure, Mark. Thank you. Special thanks to Misha Frankel Duval for the production of this.

11:53You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

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