US President Donald Trump says he has reached an agreement with Venezuela that he says gives the US a majority role in a venture involving well over 65 billion barrels of the country's proven oil reserves.

Trump called the deal the “biggest oil deal in world history” and said it would boost U.S. oil reserves and help bring down fuel prices over time. These claims have not been independently verified, and analysts say any significant increase in Venezuelan production will likely take years.

Venezuela’s interim President Delcy Rodriguez said the deal will last for 25 years and aims to raise crude production to more than 1.5 million barrels a day.

Venezuela will maintain ownership and sovereignty over its natural resources, Rodríguez said, adding the deal involves 17 strategic oil fields. The wider plan involves the development of eight more greenfield oil blocks, she added.

Rodríguez said the deal could generate some $209 billion for the Venezuelan state, based on an oil price of $65 a barrel. Under the arrangement, about $19 from each barrel produced and sold would go directly to the Venezuelan government, she said.

The Venezuelan government has promoted the deal as a way to rebuild an oil industry battered by years of underinvestment, mismanagement and US sanctions.

Structure indeterminate

The precise terms of the deal are unknown because the full agreement has not been released.

US officials have said the arrangement is a partnership between the US government and Venezuela and private industry. The new company would be entitled to develop 17 oil fields that had not been developed previously, and the US would have an effective 55% share of the production, AP reports.

There has also been some mention of a separate 100-year concession regarding the venture, although the link between that and the 25-year bilateral agreement announced by Rodríguez is yet to be clarified.

The difference matters because the agreement does not simply give the United States control of Venezuela’s oil reserves. Instead, it appears to put US interests in a strong position to dominate production and access to oil through a new commercial framework.

“No cost to the American taxpayers," Trump said of the deal. Secretary of State Marco Rubio called it a win-win for both countries, saying it could draw nearly $100 billion in private investment to Venezuela.

Concerns about production and fuel costs

Analysts have questioned how soon the deal could translate into higher output or lower US petrol prices.

Venezuela has the world’s largest proven crude oil reserves, but its oil industry has been hamstrung by ageing infrastructure, limited export capacity and years of underinvestment. To move production significantly higher would require major capital spending and improvements in power, transport and refining infrastructure.

Energy analysts quoted in international media also warned that the deal is unlikely to have an immediate impact on US fuel prices.

Venezuela’s target of more than 1.5 million barrels per day is ambitious, and it is unclear how quickly the investment required could be deployed.

Questions of law and politics

But there is also a debate in Venezuela on the legal basis of the agreement.

Government opponents have demanded that the government explain how the arrangement conforms to Venezuela's constitution and laws governing hydrocarbons. The lack of a final agreement in the public domain has exacerbated those concerns.

"There is no clear precedent for the U.S. government entering into an agreement to operate Venezuelan oil fields, and there is a question as to whether such a structure would be compatible with Venezuelan law," energy consultant David Goldwyn told Reuters.

Additional scrutiny is likely to follow the political context in which the deal was reached. Nicolas Maduro was captured by the US military in January and brought to the United States to face federal drug-trafficking charges, and Rodriguez took over as interim president.

The deal represents a significant advance in Washington’s involvement in Venezuela’s oil industry. For Caracas, the government says, foreign capital and technology are needed to restore production, but Venezuelan ownership of its natural resources will be maintained.

But the long-term impact of the deal will depend on many details that are not yet public, including who the private operators will be and what role they will play, how the financing will be structured, how ownership and output will be divided, and what legal mechanisms will govern the oil fields.