U.S. Secures 55% of Venezuela Oil Venture, Output Years Away
With U.S. markets closed, the weekend's biggest development came in oil. Trump announced a deal with Venezuela on Saturday, August 29 that hands the U.S. side 55% of the output of a new joint venture, while ownership of the 65 billion barrels of proven reserves stays with Venezuela. The agreement envisions more than $100B of investment across 17 strategic fields, and the White House argues it will bring gasoline prices down.
The market read splits in two. There is no near-term supply increase to price: Venezuela pumped roughly 1.1 million barrels a day in July on OPEC secondary-source estimates, and Rystad Energy chief economist Claudio Galimberti says new output will take "several quarters and, in quite a few cases, years." What can be priced sooner is the production and service contracts; Chevron rose 0.9% and Halliburton more than 2% on Friday on reports that signings were being prepared in Caracas. The legal footing is contested as well: the counterparty is an unelected acting government.
The second story is in payments. Stripe and Advent withdrew their $60.50-per-share offer for PayPal, which valued the company at $53B; the stock fell 12.7% on Friday. Three reasons are cited for the retreat: a board that was unlikely to accept anything meaningfully below $70, questions about whether the buyers could finance that price, and the antitrust review a combined entity processing roughly $3.7T a year would face. The shares are still up about 30% from where they traded before July's initial report, so the takeover premium has not been fully erased — but from here the case rests on the company's own turnaround rather than on a bid.
