The White House has set out the architecture of the sweeping US-Venezuela oil agreement President Donald Trump unveiled last week. In a fact sheet released on August 31, it confirmed that the Pentagon's investment arm would take a stake in the private Venezuelan operator chosen to run it, headed by a controversial businessman who has twice been arrested in the UK over money-laundering and embezzlement allegations he denies.
The operator, North American Blue Energy Partners (NABEP), is led by Alejandro Betancourt López, a 46-year-old Venezuelan tycoon with two decades of ties to the country's governing elite. His company was named publicly for the first time as Washington's chosen partner in a venture that grants it 100-year concessions over 17 oil fields holding an estimated 65bn barrels of crude, equivalent to roughly a fifth of Venezuela's proven reserves.
Under the terms disclosed by the White House, the Office of Strategic Capital – an investment arm of the Pentagon, now formally the Department of War – would hold a 35% stake in NABEP's parent company "at no cost to the American taxpayer." The State Department separately secured the right to buy a fifth of the venture's output at production cost, plus first refusal over the remaining 80%, terms designed to guarantee Washington a supply of discounted Venezuelan crude for its depleted Strategic Petroleum Reserve and for military use.
The disclosure, just days after Trump first touted the pact on social media as "the biggest oil deal in world history," fills in gaps that had fuelled confusion and speculation since August 28, when neither government named the Venezuelan counterparty or clarified how the arrangement would work. Yet it does not resolve every question: officials in Washington and Caracas did not release the underlying contract, decree or licence, and several figures in the public statements sit awkwardly alongside one another.
A controversial partner
Betancourt's rehabilitation has been rapid. British police detained him twice last year, in September 2025 on a Spanish warrant alleging money laundering and tax fraud, and again two months later after Swiss prosecutors sought his arrest as part of a probe into alleged embezzlement from the state oil company PDVSA. For much of this year he was effectively unable to leave London, where he has long been based, while contesting possible extradition to Switzerland. He has not been formally charged in any of the three jurisdictions, and Sara Chouraqui, NABEP's general counsel, said in a statement quoted by the NYT that "Mr Betancourt has never been charged with a crime in any jurisdiction."
It was Secretary of State Marco Rubio personally who wanted him freed up to work on the Venezuela talks, the New York Times reported, citing a person familiar with the effort; State Department officials subsequently lobbied their Swiss and British counterparts to relax the curbs on his movement.
Betancourt built his early fortune under the Chávez government through Derwick Associates, an electricity contractor he founded in the early 2010s that, according to El País, won at least 11 state contracts worth some $5bn to build thermoelectric plants "without having the slightest experience" and "without any competitive bidding." He later built NABEP into Venezuela's second-largest private oil producer, currently pumping more than 200,000 barrels a day, a figure the company says it aims to lift above 1mn b/d with the fresh investment. Thomas Posado, a Venezuela specialist at the University of Rouen, told France 24 that Betancourt embodies the archetype Venezuelans call a "bolichico," part of a business class "whose immense fortunes depend entirely on the goodwill and favours of the government, whether during the era of Hugo Chavez or Nicolas Maduro." Tom Long of the University of Warwick said Betancourt appears to enjoy the trust of Interim President Delcy Rodríguez, a position "really dependent on relationships with the state" rather than on any formal role. Betancourt himself said in a statement that the deal would unleash Venezuela's potential "to the great benefit of both Venezuelans and Americans."
Contradictions in the fine print
The Pentagon's exact role has proven hard to pin down. The New York Times reported that the 35% stake would in fact take the form of "penny warrants," a right to buy shares at a token price, sometimes just a single cent, rather than a straightforward shareholding, and one the Pentagon office is not obliged to exercise. That detail sits uneasily with a statement the Pentagon's chief spokesman, Sean Parnell, gave on August 29 insisting the office's "role is strictly limited to providing capital assistance in the form of a loan, loan guarantee, or technical assistance" and that it "cannot take any ownership stake in private companies.”
The numbers also evolved. The Associated Press had initially reported, citing an unnamed US official close to the original announcement, that Washington's effective share of the venture's output would be 55%; this week's more granular breakdown, a 35 % equity stake plus a guaranteed right to buy a further 20% of output at cost, adds up to the same figure, suggesting the two accounts describe the same arrangement rather than a change of terms. Less easily reconciled is the mismatch between the 100-year concessions granted to NABEP over the individual fields and Rodríguez's own account, given in a televised address on August 30, that the wider agreement would run for 25 years, during which Venezuela would collect a minimum royalty of 16% and income tax of 34%. Neither government has explained how the two timeframes relate to one another.
Analysts at UBS's chief investment office noted that a venture requiring billions of dollars in US government backing may need congressional sign-off, and that opinion polls point to Democratic gains in the legislature at midterm elections in November, leaving no guarantee lawmakers would support the deal. The bank's team, led by chief investment officer for emerging markets Alejo Czerwonko, wrote in a note that the administration could instead structure the arrangement as an executive-branch partnership requiring no congressional vote, though that route "would be vulnerable to a possible change in the executive branch in 2028," and added that legal challenges in US courts "cannot be ruled out either."
Reasserting the Monroe Doctrine
The White House statement framed the deal explicitly in geopolitical terms, saying most of the fields being handed to NABEP "were previously controlled or operated by Russian and Chinese firms, or by corrupt cronies of Maduro and Chavez," and declaring that Trump "has re-established the Monroe Doctrine, purging foreign malign influence from our backyard." Among the assets changing hands, according to Guacamaya, a Caracas-based oil-focused outlet, are Lake Maracaibo operations formerly run by China Concord Petroleum, a private Chinese firm, and the Intercampo Norte field, previously operated by China's state-owned CNPC.
Two further fields tied to Russian and Chinese state firms – Petromonagas and Petrolera Sinovensa, together producing close to 200,000 b/d – have a less certain future, and officials in Moscow and Beijing have so far stayed quiet on exactly what their state companies stand to lose. In a first sign of pushback on September 1, Guo Jiakun, a spokesperson for China's foreign ministry, stated that “the cooperation between China and Venezuela is protected by international law and the laws of both countries, and China's lawful rights and interests in Venezuela must be protected,” according to Xinhua.
Washington’s framing, meanwhile, carries some irony: before NABEP, Betancourt's companies had worked the same Lake Maracaibo basin through a joint venture with Gazprombank, the lending arm of Russia's state gas company, Guacamaya noted.
Whether the oil will flow
Even if the terms hold, analysts are sceptical the deal will move quickly. Writing in The Conversation, Sahara Hoff, a research associate at the University of Sydney's United States Studies Centre, pointed out that the 65bn barrels covered by the arrangement dwarfs the roughly 718.6mn barrels currently sitting in US strategic stocks, and cautioned that Trump's promise of lower fuel prices is unlikely to be fulfilled soon. Petrol prices have risen 37% and crude oil more than 20% since the war with Iran effectively shut down shipping through the Strait of Hormuz in March, while food prices are running 3% above year-ago levels and still climbing.
Venezuela's oil sector currently accounts for just 1% of global production after two decades of underinvestment, ageing infrastructure and crippling US sanctions; Chevron remains the only US major that never left the country following its 2007 nationalisation of oil assets by then-president Hugo Chavez, and is separately negotiating an expansion of its own operations there.
But Rystad Energy estimates it could take until the mid-2030s simply to restore Venezuela's existing fields to full output, while developing new fields could require upwards of a decade and at least $100bn. Aslak Orre, a Venezuela expert at Norway's Chr. Michelsen Institute, went further, telling France 24 that even tripling Venezuela's current output to match its historic 1970s peak would take "exactly 50 years to get 65bn barrels out of the ground," evidence, in his view, that the pledge amounts to "megalomaniac fantasies" rather than a serious production plan.
Speaking to the FT, Francesco Monaldi, director of the Latin America Energy Program at Rice University warned that “In the short term, there’s very little that can be done to increase production quickly, so this year will likely see an increase of less than 200,000 barrels.”
A further complication is the black gold's chemistry: America's strategic reserve was designed around light crude, while Venezuelan output is overwhelmingly heavy and extra-heavy, grades that require specialised refining, capacity that is already stretched thin by the Hormuz-related disruption.
UBS's analysts struck a similarly cautious note in their report, observing that Venezuelan oil output has risen by only 100,000-200,000 barrels a day in the roughly eight months since Nicolás Maduro's removal in January, a modest gain from what they called "a very low base." Absent a legal framework able to survive political turnover in both countries, they wrote, the agreement is "unlikely to result in materially higher foreign investment in Venezuela or a meaningful increase in oil production over the short to medium term."
Open legal questions
Several fundamental questions remain unanswered, according to UBS, which flagged the fields' allocation to NABEP without any competitive tender, a point also raised by Reuters. UBS's analysts questioned whether Rodríguez, as an interim president operating without a transparent bidding process, compliance safeguards or approval from the National Assembly, has the legal authority to bind future Venezuelan governments to a multi-decade contract, noting that the country's 1999 constitution declares hydrocarbon deposits "public-domain property" that is "inalienable," and reserves petroleum activity for the state. Reuters reported separately on August 31 that Chevron, along with India's ONGC, Italy's Eni, GeoPark and GE Vernova, were nearing their own, unrelated agreements with Caracas.
"[The Venezuelan oil] was this unbelievable value that was sitting dormant," Trump said during a press briefing on August 31. "But we're going to be taking all of that."
UBS called this an "extraordinary announcement, loaded with execution risks," summing up the overwhelming scepticism running through its note. But its analysts also added that Venezuela's evident willingness to lean on US capital and expertise for its reconstruction could still, in time, evolve into "a broader and lasting bilateral partnership," provided it is eventually grounded in legislation more solid than the statements issued so far.
Trump Says Venezuelan Oil Will Refill U.S. Strategic Petroleum Reserve
The United States will use Venezuelan crude to refill the Strategic Petroleum Reserve, President Donald Trump said on Sunday on social media.
Describing the move as a “Gift from Venezuela to the People of the United States,” President Trump said the “topping out” will begin soon, as quoted by Reuters.
The Strategic Petroleum Reserve has been drawn close to minimum operational levels amid a surge in U.S. crude oil exports in response to the crisis in the Middle East. As of August 21, per Reuters, the SPR held 290 million barrels. This was the lowest level in almost 44 years.
The “gift” that President Trump expects from Venezuela, however, may take a while to reach its destination. Venezuela exported 1.16 million barrels of crude oil daily last month, a slight decline from June’s 1.2 million barrels daily, on lower withdrawals from storage. The fact it needs draws from storage to top up exports suggests production is not rising as fast as some may hope.
There are also port capacity constraints, with reports from earlier this month saying tankers have to wait for as long as 30 days to load, as ports struggle with power outages and quality problems with the crude oil getting shipped out. Still, in July, exports to Venezuela’s biggest oil destination—the United States—averaged 786,000 barrels daily, which was the highest since early 2019.
Last week, meanwhile, news broke that the U.S. federal government is negotiating a direct ownership stake in the country’s high-yield field that contains combined reserves of 90 billion barrels of crude. Currently, Venezuela is pumping oil at a daily rate of 1.25 million barrels per day. To boost this, a lot of investments would be required, with Rystad Energy estimating the total for the next ten years at some $180 billion.
By Irina Slav for Oilprice.com
Venezuela says it will retain 'sovereignty' over its oil reserves despite US deal
Venezuela's acting president says the aim is to turn the country's underground resources into a "source of social and economic well-being for the people of Venezuela."
Venezuela's acting President Delcy Rodríguez said on Saturday that the country would retain "sovereignty" over its oil resources despite a new agreement with the US that grants Washington significant access to the South American nation's reserves.
"One thing must be absolutely clear: Venezuela retains ownership and sovereignty over its resources," Rodríguez said in a speech broadcast on state television.
Under the terms of the agreement, which was announced by US President Donald Trump on Friday, the US is set to take control of 65 billion barrels of Venezuela's oil reserves.
According to Rodríguez, the deal also "calls for the development of 17 strategic fields" and could see investment of "more than $100 billion, and more than $209 billion in taxes for the state."
Rodríguez says the aim is to turn Venezuela's underground resources into a "source of social and economic well-being for the people of Venezuela."
However, some have accused the government of a lack of transparency surrounding the deal, with questions also being raised on social media about whether it will truly benefit Venezuelans.
The agreement comes after more than a decade of struggling to attract investment amid a deep economic crisis in the country.
Some analysts have now welcomed the US' role as a "guarantor" for investments into Venezuela, which has the world's largest proven reserves.
"Without this, these fields would not be developed over the next 10 or 15 years," Oswaldo Felizzola, a professor at the Institute of Advanced Studies in Administration (IESA), told AFP, adding that Venezuela's state-owned energy firm Petróleos de Venezuela "does not have the financial resources to do so."
Oil production in Venezuela rose by 29.8% between January and July, reaching 1.2 million barrels a day, although it remains well below the three million barrels a day recorded 25 years ago.
Rodríguez has introduced reforms in the mining and oil sectors to facilitate the entry of private and foreign capital, while Washington has relaxed sanctions on Venezuela's oil sector.
In a post on X, US Secretary of State Marco Rubio hailed the deal as a "huge win for both the American and Venezuelan people."
"It demonstrates how President Trump's bold foreign policy is driving America First wins: securing stable reserves and low-cost oil in our Hemisphere and lowering gas prices here at home," he wrote.
What we know about Trump’s deal giving the US access to Venezuela’s oil
Besides a social media post from US President Donald Trump, the White House has said little about what he is calling “the biggest oil deal in world history” in Venezuela.
Trump said the agreement announced on Friday night would give the United States a stake in Venezuela’s vast oil reserves, a step towards his goal of extracting energy from the country after American forces captured then-President Nicolás Maduro in a middle-of-the-night raid in January and brought him to New York to face federal drug trafficking charges.
Venezuela’s interim leader, Delcy Rodríguez, described the deal as a step towards economic recovery that will modernise the country’s oil industry. In a televised address to the nation late on Sunday, Rodríguez insisted Venezuela's sovereignty is secure and said she wants the country to become a global energy powerhouse.
Earlier on Saturday, she said the oil reserves would “cease to be an inert, cold statistic and will instead become concrete solutions. Housing is one of them.”
But the answers to many questions, including how soon the reserves could be drilled and who will pay to make it happen, were not immediately clear. No text of any agreement has been released.
Here's a look at what is known and unknown:
What are the terms?
The US government and an unnamed private operator in Venezuela formed a new company that was given rights to develop untapped oil fields.
A statement from Rodríguez said the deal involves the development of 17 fields with a proven potential of 65 billion barrels. It said the agreement could draw $100 billion (€86 billion) in investment into Venezuela’s oil industry and yield more than $209 billion (€180 billion) in taxes for Caracas.
Trump said the agreement was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Rodríguez.
The deal gives the United States 55% effective output of the new private company, including an ownership stake and rights to buy oil at cost. American purchases of the oil will go towards the US Strategic Petroleum Reserve along with the military, according to a US official who was not authorised to discuss the matter publicly and spoke on the condition of anonymity.
The company would be the second-largest corporate holder of proven reserves after Saudi Aramco, according to the official.
How will Venezuelans react?
Some in Venezuela considered it a betrayal of what their government has stated repeatedly for decades: Venezuelan resources are for Venezuela, and leaders would not allow the US government access to those resources.
Harvard University professor Ricardo Hausmann, a former Venezuelan planning minister, called it a “shameful deal."
“Venezuelans will not respect this illegitimate deal and no major US oil company will take it seriously because they know it will not last,” Hausmann said on social media, adding that Rodríguez “has no legitimacy or constitutional power to commit Venezuela to any such deal."
In her national address, Rodríguez pushed back on some of the early criticism.
“One thing must be absolutely clear: Venezuela retains ownership and sovereignty over its resources,” Rodríguez said. She said the goal is to reach other agreements with transnational private companies such as Chevron, Repsol and Shell.
She added: “We want to be an energy powerhouse, a major oil producer, a significant gas exporter, and a major national petrochemical developer."
What's the reaction on Capitol Hill?
It is unclear whether Congress will play a role in the arrangement, but lawmakers from both parties were quick to weigh in.
Trump allies called it a win.
Sen. Bernie Moreno, R-Ohio, said it was a historic deal that helps both countries. “If it were up to DC Democrats, Maduro would still be in power, Venezuelan oil would be going to China at half price, and the people of Venezuela would be getting robbed by a corrupt regime,” Moreno wrote on social media.
It was condemned by Democrats who said Maduro's capture was a means to this end.
Sen. Tim Kaine, D-Va., said Trump was always after Venezuela's oil, branding it “corruption at epic scale.”
“Will prices come down for Americans? Who knows but likely not as much as Trump has forced them up thru his idiotic Iran War," Kaine said on social media.
Sen. Chris Van Hollen, D-Md., said Trump “put our service members at risk to get Venezuelan oil for his billionaire buddies.”
What questions remain?
Many important details remain unclear, including who will cover necessary investments, the identity of the private operator and how America’s stake in the company breaks down.
The US will get 55% of the company's effective output, but it was not clear what portion of that comes from an ownership stake and how much comes from the right to buy oil at cost.
It also is unclear how the industry will react. Persuading big American oil companies to return to the region could prove a challenge given the political uncertainty and damaged infrastructure.
Chevron, the only US oil company actively producing in Venezuela, declined to comment. Separately from Trump’s announcement, Chevron already had been in talks to expand investment in the country. Exxon Mobil also declined to comment.
David Oxley, chief climate and commodities economist at Capital Economics, said that on its face, the deal could double US oil reserves and reduce dependence on crude oil from Canada and Mexico. But Oxley, writing in a commentary, cautioned that there are logistical hurdles and said the value of Venezuela's reserves may have been exaggerated under former President Hugo Chávez.
Even with legal and security guarantees, it is not clear that US oil companies “would be eager to invest,’’ he wrote, noting that “there simply might be more enticing commercial opportunities on offer elsewhere.’’
No comments:
Post a Comment