The Pentagon Venezuela oil stake at the heart of Washington’s deal with North American Blue Energy Partners (NABEP) hands the US government a 35% equity share in a company that controls concessions to 17 oilfields in Venezuela for the next century, with no cost to the US taxpayer. Nothing quite like it appears to exist in modern American history.
The arrangement was confirmed by the White House this week. Under it, the Rodríguez government in Caracas, led by interim President Delcy Rodríguez, following what the deal’s architects describe as the ousting of former President Nicolás Maduro, granted the concessions to NABEP, a company headquartered in Barbados. NABEP then granted the Pentagon’s Office of Strategic Capital the equity position in return.
What the Pentagon Venezuela oil stake actually gives Washington
The structure goes well beyond a straightforward equity holding. On top of the 35% stake, the State Department has the right to purchase 20% of NABEP’s oil output at the cost of production, rather than at market price. It also holds the right of first refusal over the remaining 80% of NABEP’s production, though a US official told reporters that the administration does not anticipate exercising that right routinely. The right would function as a long-term insurance policy for moments of crisis, the official said.
The US government can veto appointments to NABEP’s board of directors, and a majority of the board must be US citizens. The deal is governed by US law and subject to US courts.
‘This is straight up a state-owned enterprise,’ said Scott Lincicome, an international trade law expert at the Cato Institute. ‘De facto control of 100% of output at cost, that’s ownership.’
The White House says the deal gives the US majority control over 65 billion barrels of Venezuela’s proven crude reserves, roughly 20% of the 303 billion barrels the country is thought to possess. Patrick Rutty, director of global intelligence at Enverus, said that if those figures are accurate, NABEP would rank as the second-largest oil company in the world measured by proved reserves, behind Saudi Aramco, and would be around four times larger than Exxon’s reserves.
The man at the centre of the deal
NABEP’s chief executive is Alejandro Betancourt, a figure whose background has drawn scrutiny on several continents. According to EdgeX Exchange, Betancourt has faced investigations in the US, Europe, and Venezuela over alleged corruption, money laundering, and tax fraud. He has never been charged with a crime and has denied wrongdoing.
Separately, Yahoo Finance reports that Betancourt made a fortune selling power turbines about 16 years ago, during an electricity crisis in Venezuela. His defenders point to NABEP’s operational record: the company has said it scaled production from 18,000 barrels per day to more than 200,000 barrels per day, making it the second-largest private oil producer in Venezuela by the company’s own account.
A US official, speaking on condition of anonymity, acknowledged Betancourt’s controversial history directly. ‘I’m not nominating anyone for sainthood here,’ the official told reporters. The official described Betancourt as ‘a proven oil operator’ who had ‘in the past been helpful to the United States government’ and who had the knowledge to bring Venezuela’s idle fields back into productive capacity.
Tyler Priest, a historian of the oil industry at the University of Iowa, said the Venezuela deal appears to be without precedent. The US considered taking direct control of an oil concession in Saudi Arabia during the Second World War but backed down due to industry opposition, he said. A congressional vote to create a federal oil company in 1976 narrowly failed. ‘For the American government to get involved with a shady businessman concessionaire in a country that is known for endemic corruption, it just raises all sorts of red flags,’ Priest said.
Finances, politics, and legal questions
NABEP has said the deal will bring nearly $100 billion of investment to Venezuela’s oil sector, with a near-term target of more than 1 million barrels per day. According to Crypto Briefing, projected tax and royalty payments to the Venezuelan government are expected to exceed $209 billion over the first 25 years of the agreement.
Energy Secretary Chris Wright, speaking in Caracas, described the deal as ‘not a displacement or a replacement of private companies’ and said the US government would ‘not be the operator or producer’ of Venezuela’s reserves. The administration’s stated goal is to encourage private investment by strengthening investor confidence through the US government’s presence.
That logic has attracted scepticism. ‘This entity came about due to a lack of private investment interest in Venezuela,’ said Lincicome. ‘It’s hard for me to see where private capital now floods in.’ ExxonMobil’s chief executive told Trump that Venezuela is ‘uninvestable’. ConocoPhillips has indicated it does not plan to return until it recovers money owed by Caracas. Chevron, the only US oil major active in the country, announced a separate deal this week to invest $7 billion to more than double its production there by 2031.
Legal questions also hang over the arrangement. Before the deal was announced, Pentagon spokesperson Sean Parnell said the Office of Strategic Capital’s statutory authority ‘is strictly limited to providing capital assistance in the form of a loan, loan guarantee, or technical assistance’ and that it ‘does not take equity stakes in private companies.’ After the White House confirmed the 35% stake, a US official said the equity position was ‘structured consistent with the statutory authority’ of the Office, without elaborating on the legal basis.
Peter Harrell, who served as an international economics adviser on the National Security Council under President Joe Biden, said the Trump administration ‘does not appear to have laid out any legal rationale or justification for how they think they can do this.’ Bob McNally, president of Rapidan Energy, warned that a Democratic winner in the 2028 presidential election would reconsider or possibly terminate the deal, while a future Venezuelan regime could also tear it up regardless of who sits in the White House. ‘Significant political risks in both Washington and Caracas will limit the plan’s impacts,’ McNally said.
