President Donald Trump announced Friday night that the United States had secured a long-term stake in a vast share of Venezuela’s oil fields, a potentially costly and legally precarious proposal that aims to nudge reluctant energy companies to drill in the risky region.
The plan involves the U.S. taking more direct control over Venezuelan reserves as crime and steep logistical challenges discourage private investors.
Under it, according to federal officials, the U.S. has gained a controlling stake in nearly a quarter of Venezuela’s untapped oil reserves. It makes the U.S. the majority owner of a giant new joint venture oil company that will hold 100-year contracts at the Venezuelan oil fields.
The key Venezuelan partner in the deal is Alejandro Betancourt, who controls the second-largest private oil company in the country. Betancourt, 46, has also been the subject of investigations in multiple countries into alleged money laundering and faces a Swiss warrant for his arrest.
“The United States of America has just entered into an Agreement with the Country of Venezuela on, THE BIGGEST OIL DEAL IN WORLD HISTORY!” Trump posted on social media Friday night. “At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured majority U.S. control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela.”
The announcement comes as Trump’s approval ratings hover in the mid- to high 30s about two months before the midterm elections. He has repeatedly assured the country that the high price of gasoline, a key voter concern tied in significant part to the unresolved Iran war now entering its seventh month, is only temporary. In his post this evening, Trump said the Venezuela deal “will substantially lower Gas Prices for all Americans,” although most experts say that any real increase in Venezuelan oil production is years away.
Trump also claimed the deal would come at no cost to U.S. taxpayers. But deal points reviewed by The Washington Post and interviews with people who were close to negotiations as the deal came together suggest that for the plan to succeed in producing oil in the amounts the administration projects, the U.S. government may ultimately need to invest significant amounts.
A list shared with The Post before the deal was announced noted 17 oil fields in which the U.S. would take a stake. Several of the fields lack any infrastructure or access to transport hubs to treat and move the crude. Those where such infrastructure does exist have fallen victim to years of neglect and theft of machinery.
Pumping oil from the fields could require investments of many billions of dollars and costly security plans to protect oil workers and production facilities in lawless and violent regions. The deal points reviewed by The Post say the U.S. government stake in the newly formed oil company will be split between equity ownership and guarantees that it will purchase oil produced by it at cost to refill the U.S. Strategic Petroleum Reserve.
But it is unclear who would make the tens of billions of dollars in infrastructure investments needed before oil can be pumped from the largely dormant fields. Major oil companies have mostly seen such spending as too risky.
Secretary of State Marco Rubio posted on X that the agreement “will bring nearly $100 billion in private investment” to Venezuela, without specifying which companies have committed to such spending.
Betancourt’s company, North American Blue Energy Partners, or NABEP, would be the major private Venezuelan entity involved, according to a person familiar with the discussions.
The Defense Department, through its Office of Strategic Capital (OSC), would oversee and help fund the oil field licenses, according to the person familiar with the discussions and one other with knowledge of the talks. The mission of that office is to “accelerate and scale private investment in critical supply chain technologies.”
Pentagon officials said they could not comment on any particular deals being weighed at the OSC, but they stressed that the office cannot take any ownership stake in private companies.
“OSC’s role is strictly limited to providing capital assistance in the form of a loan, loan guarantee, or technical assistance (including transaction structuring for developing and financing investments),” said a statement from Pentagon spokesman Sean Parnell.
Bloomberg News first reported the involvement of NABEP and the Pentagon in a potential Venezuela deal.
Betancourt has become a key intermediary between the U.S. and Venezuela and has helped broker early contracts to get oil pumping fast in the country, The Post reported this week.
He has ramped up oil output by NABEP to nearly 200,000 barrels per day from 18,000 in just two years. In the past decade, he has also faced multiple investigations, in Switzerland, Spain and the U.S., into alleged money laundering.
U.S. officials this year have lobbied to resolve the case in Switzerland in a way that would avoid criminal charges and end travel restrictions against the Britain-based Betancourt, The Post reported, citing two people familiar with the matter, who spoke on the condition of anonymity to discuss a sensitive matter.
The U.S. has also not acted on a Swiss arrest warrant against him, the people said. Instead, the U.S. has allowed Betancourt to enter the country repeatedly for meetings with the Trump administration, other people familiar with his travel said. Betancourt has not been charged, and his attorney has denied he was involved in money laundering.
Substantial hurdles to executing a Venezuelan oil deal remain.
There is strong opposition in Venezuela to ceding control of natural resources to the U.S. Revisions to the Venezuelan constitution may be required before the U.S. gains control of any oil fields, and the prospects of that happening are uncertain amid U.S. antipathy.
“An illegitimate interim [Venezuelan] government with an illegitimate hydrocarbons law has no legitimacy to strike this unconstitutional deal,” Ricardo Hausmann, a Harvard University economist who served as Venezuela’s minister of planning in the early 1990s, said in a post on X. “It will be a fiasco for all involved, starting with @SecRubio.”
After striking the deal with the U.S., Venezuela is weighing withdrawing from the OPEC consortium of energy-producing nations, according to people familiar with the matter, a move the Trump administration would welcome as it seeks to exert more influence over the international oil trade. Venezuela is a founding member of the Organization of the Petroleum Exporting Countries.
“I suspect the withdrawal from OPEC is associated more with U.S. control over the country than the reported U.S. investment deal,” said an oil industry official who spoke on the condition of anonymity to talk candidly. “To the extent the U.S. is building a Western Hemisphere energy block, it makes no sense for Venezuela to belong to OPEC.”
Trump made Rodríguez “interim” president while pledging that her country eventually will return to democratic, elected governance. “From a legal standpoint in Venezuela, Delcy has no standing,” said a Venezuelan with long participation in the oil industry, who also spoke on the condition of anonymity to provide a candid assessment.
The person said this will leave banks and other institutions typically involved in financing drilling operations asking, “Why are we signing deals with people who have zero legitimacy?”
Rodriguez said in a statement that the agreement “will have a significant impact on our nation’s revival.”
Under the structure of the deal, according to people familiar with it, oil could be produced using an existing joint venture legal structure in Venezuela through which the U.S. would be granted access to develop the oil fields, but Venezuela would still be guaranteed a cut of all revenue they produce.
The deal could face stiff resistance in Venezuela as well as in the U.S.
Any U.S. government expenditures or loans needed to develop oil fields would probably need congressional approval just as Trump’s GOP allies risk losing control over the legislative branch in the upcoming midterm elections.
Democrats have been unyieldingly critical of the administration’s endeavors in Venezuela, including its opaque dealmaking with the country’s natural resources industries, since the U.S. ousted former Venezuelan strongman Nicolás Maduro.
Despite claims by the Trump administration that Maduro’s removal would unleash a frenzy of drilling in Venezuela, oil production there has increased little, up only about 200,000 barrels over the past year, with projections for the same increase or less next year.
It remains unclear “whether anybody would want to operate” in a country where electricity is limited and port infrastructure is not capable of handling increased production, among other limits that “are holding back the majors from going into the country right now,” said David Goldwyn, head of the international energy consulting firm Goldwyn Global Strategies.
Even if the deal enables the U.S. to supersede all Venezuelan government jurisdiction over the oil fields, those areas “would have the same risks” that have limited new investment so far to smaller, less risk-averse companies, Goldwyn said.
The Trump administration has announced other major deals for the U.S. to take a big stake in energy or natural resources production, only for little to materialize. These include plans for the U.S. to take a stake in Ukraine’s reserve of critical minerals and an announcement nearly a year ago that the U.S. would fund construction of large nuclear reactors in return for a stake in the Westinghouse corporation.
Neither of those agreements has led to the breakthrough developments in energy production that the administration forecast when they were announced.
The post Trump says he has secured a vast U.S. stake in Venezuelan oil industry appeared first on Washington Post.
