United States signs oil deal with Venezuela

**Bisi Adebayo** (0:01)
A huge oil deal between Venezuela and the United States, but who really stands to benefit? It's World Business Express from the BBC World Service, I am Bisi Adebayo. Also, could Kenya be running short of milk? And after nine months at sea, thousands of US sailors finally get some time off.
So one of the world's biggest oil deals has been signed reshaping the relationship between the United States and Venezuela. Under the agreement, a US led company will control 17 Venezuelan oil fields for the next 100 years, covering more than a fifth of the country's proven reserves. President Trump calls it the biggest oil deal in history, and Venezuela says it could bring in a hundred billion dollars of investment, but critics say the terms heavily favor Washington. This is how former oil minister of Venezuela, Rafael Ramirez, described the deal.

**Ross Mould** (1:02)
Look, I believe this is an agreement that is detrimental to the country, very bad for our future as an oil producing nation, because under this deal, sovereignty over more than 23 percent of our reserves is being signed away, and it has been awarded to a newly created company, a company with absolutely no experience to manage a share that currently exceeds Venezuela's total oil production.

**Bisi Adebayo** (1:29)
I had a chat with Fabiana Lamborglia, who is an energy and economics analyst from Venezuela.

**Fabiana Lamborglia** (1:35)
This is something that has never happened in the history of Venezuela. The Venezuelan government is breaking some deals with the United States. I mean, they are creating these deals about 17 oil fields in Venezuela. They are discussing these private concessions with the United States government, through this company that it's called North American Blue Energy Partners. And it's also controlled directly by the United States government, specifically from their capital office from the Pentagon, that will hold at 35% of the assets of these companies. The United States will have the right to purchase at production cost at least the 20% of the production of these oil fields.

**Bisi Adebayo** (2:20)
Venezuela says this could bring in 100 billion dollars of investments. But given the state of the country's oil industry, how realistic is that?

**Fabiana Lamborglia** (2:28)
Currently, the amount that they have announced is around the size of the Venezuelan economy, our GDP currently. It is like, how can just one company, as North American Blue Energy Partners, can invest this amount in Venezuela? The Department of State of Venezuela have stated that it is up to 100 billion. But yeah, how can this really be like true, as the major companies such as Exxon Mobil or ConocoPhillips are still not investing in Venezuela. And we didn't have here like a large banking system that can provide loans for these projects.

**Bisi Adebayo** (3:05)
Fabiana Lamboglia. Now, if you're buying milk in Kenya, you may have noticed it's getting more expensive because the country is facing a shortage, with farmers producing less because of delayed rains, poor pasture and a sharp rise in the cost of animal feed. Irene Githinji is a local farmer in Nairobi.

**Irene Githinji** (3:24)
I disposed three of my dairy cows so that I can leave a few which I can feed where. If the government would come in and try to intervene for the producers, even for the farmers, so that we can be able to buy the dairy meal at a lower price, it would be better.

**Bisi Adebayo** (3:47)
And what about the prices of milk now at some shops because we hear that they're practically hitting the roof. Are you getting paid more right now?

**Irene Githinji** (3:57)
No, like from tomorrow, I'm increasing a liter of milk from 75 shillings to 80 shillings, so that I can also pay the farmer a better price for their milk.

**Bisi Adebayo** (4:10)
So how long do you think this will go on for?

**Irene Githinji** (4:12)
If the rains come, the way they are saying that it will come, it will be very worrying. I'm trying to buy a lot of hay. That is the first I use. I store it for that season.

**Bisi Adebayo** (4:24)
Are you receiving any form of support from the government?

**Irene Githinji** (4:27)
No, not really. I'm not receiving any support. There's no support, in fact.

**Bisi Adebayo** (4:33)
Irene Guthinj is there. Well, Jonathan Mweke, Principal Secretary of the Kenyan Ministry of Agriculture, says the issues wouldn't go on for too long.

**Jonathan Mweke** (4:41)
We did a surveillance in about 20 market areas across the country. And we were able to cover, without surveillance, at least 82 physical retail outlets, predominantly supermarkets. And what we found is that there is milk, especially UHT is there in Plenty, but pasteurized and extended shelf life has been a reduction of supply.