Will the U.S. really control Venezuelan oil?

0:00This season on Planet Money Summer School, we have drilled for oil in Norway, we've smuggled products into North Korea, and now we make it to our seventh continent, Antarctica. That's right, speak for me Mr. Penguin, speak for me, who is that? That's another sound of Antarctica, that's a reporter trying to interview a penguin We'll explain on Planet Money Summer School Listen on the NPR app or wherever you get your podcasts Today on State of the World Will the U.S. really control Venezuelan oil?

0:33You're listening to State of the World from NPR We bring you the day's most vital international stories up close where they're happening. I'm Greg Dixon. In a few minutes, we go to the West Bank, where Israeli settler violence drew rare condemnation from the U.S. and Israel. First, the U.S. and Venezuela say they have entered into a partnership that would give the U.S. majority control of more than 65 billion barrels worth of oil reserves. President Trump hopes the deal will lower energy costs in the U.S. Venezuela's leaders hope to bring investment and keep the unpopular U.S.-backed interim president in power.

1:12But as we hear from reporter John Otis, given the U.S. oil industry's past experiences in Venezuela, among the questions about the deal is when or if that oil gets to U.S. gas pumps. Trump calls it, quote, the biggest oil deal in world history. Under the 25-year agreement announced Friday, the U.S. government will partner with an unnamed private company to develop 17 untapped oil fields in Venezuela. Trump claims the deal will double American petroleum reserves by giving the U.S. majority control over 65 billion barrels of Venezuela's proven oil reserves.

2:02For her part, Venezuela's acting president, Delcy Rodriguez, claimed in a speech that the arrangement will bring her country jobs, foreign investment, and more than$209 billion in oil taxes.

2:24Our country has the largest oil reserves in the world, she said. But what good is it if it remains in the ground? It's a dramatic U-turn for Venezuela. Its socialist government spent much of the past 25 years lambasting Washington, shooing away U.S. oil companies and nationalizing their assets. That's the late President Hugo Chavez in 2007, celebrating his seizure of U.S.-operated oil fields in eastern Venezuela. Eventually, amid government mismanagement, corruption, and U.S. sanctions, Venezuela's oil production plummeted. In January this year, U.S. military forces removed authoritarian leader Nicolás Maduro from power and established a pro-Washington government led by Rodriguez.

3:15Trump then called on U.S. oil companies to invest$100 billion in Venezuela. But later, at a White House summit with U.S. oil majors, ExxonMobil CEO Darren Woods was wary. We first got into Venezuela back in the 1940s. We've had our assets seized there twice. And so you can imagine to reenter a third time would require some pretty significant changes. Venezuela has made some of those changes, like reducing taxes and allowing international arbitration for contract disputes. But Francisco Monaldi, who directs the Latin America Energy Program at Rice University, says U.S. firms still complain about high taxes, opaque bidding procedures, and rampant influence peddling.

4:03If you talk to the big companies here, they are all really concerned about how things are being handled. Oil production has inched up this year from just below to just above 1 million barrels per day. But that's a far cry from the 3.4 million daily barrels Venezuela produced back in the 1990s. It marks the first time Washington will become directly involved in oil production since World War II. But there are few details, and it remains unclear whether private oil companies will follow Trump's lead. My gut reaction is that this doesn't make any difference whatsoever. Amy Myers-Jaffe is an energy expert at New York University.

4:46She says Venezuela's oil fields, pipelines, refineries and ports are all badly degraded and that ramping up production will take years. These are fields that take a lot of work. It's not like Iraq or Saudi Arabia where you're going to stick a needle in the ground and the oil is just going to flow out. Many average Venezuelans are also skeptical.

5:11Now the Americans will practically own all our oil, says Caracas resident Margarita Yepes. Even so, David Smiley, a Venezuela scholar at Tulane University, says the oil deal could provide a boost to acting President Rodriguez. She heads a deeply unpopular authoritarian regime, which has denied opposition demands for free elections. They do not want to relinquish power, and they know that pleasing the Trump administration and getting U.S. investment is key. As a result, he says, the oil deal might speed up Venezuela's economy, but slow down its transition to democracy. For NPR News, I'm John Otis.

6:02It was a weekend of violence in the Israeli-occupied West Bank, with multiple assaults on Palestinians reported and one on a U.S. news crew. The attacks by Israeli settlers were condemned by both U.S. and Israeli officials, but no arrests were made. NPR's Kerry Kahn takes us to the West Bank. Louie Beirute wants to show off his home in the Palestinian town of Kusra. He drives us up a windy hillside road. He's building it for his wife and three children. Well, at least he's trying to build it. This is my house, he says, pointing at a concrete shell. As we stop about 200 feet short of it, the view of the valley below is amazing.

6:52It's close to other homes, but whenever I try to reach my house, the settlers come down, he says. That's what happened Saturday. He was with seven others installing windows. Masked men poured down the hillside throwing rocks. Beirutti says he called the Israeli military, but instead of helping them, soldiers fired tear gas into the home.

7:15Soldiers ordered them into a room, he says. They were blindfolded and handcuffed and eventually led into a military vehicle, still cuffed and blindfolded, then dropped two miles away. Who is that? Beirutti stops mid-story. He spots two large white vehicles race across a hilltop road, kicking up dust. Settlers have spotted us. Yeah, why don't we? We should leave. Let's go. Thank you. Also on Saturday, mask settlers attacked an NBC TV crew in a nearby village. The Palestinian woman they were interviewing was hospitalized. The U.S. ambassador to Israel called the settlers terrorists. Prime Minister Benjamin Netanyahu promised arrests and a thorough investigation.

8:02But by Sunday, he was downplaying the assaults as an act of a handful of troubled youth. Israel's military says it resolved the conflict swiftly and confiscated three vehicles. Kusra's former mayor, Hani Oday, says the settlers must be stopped.

8:24They are not strong, and it's wrong to say they are. They have the backing of the Israeli army, he says. And without punishment, they are emboldened. Kerry Khan, NPR News, Kusra, in the Israeli-occupied West Bank.

8:46That's the State of the World from NPR. Thanks for listening.

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9:35There is a lot changing in the shadow of this uncertainty about what happens with Iran. That and more of the week's big national security news on sources and methods. You can listen on the NPR app or wherever you get your podcasts.