President Donald Trump’s touted “biggest oil deal in world history” with Venezuela faces legal and logistical problems likely to sink it.
The Guardian reported Saturday that nearly every major claim the Trump administration has made about the arrangement falls apart under scrutiny, from how long it lasts to the Pentagon’s role in it. Venezuelan law caps oil development agreements at 25 years, not the 100 Trump has boasted about, and Venezuela’s own government has put the term at 25.
“This is all just propaganda,” Venezuelan legal expert Jose Ignacio Hernandez told The Guardian. “It cannot be implemented as announced by the administration.”
Trump announced in August that the Pentagon would take roughly a third of North American Blue Energy Partners, the second-largest private oil company in Venezuela. The move followed the January raid in which U.S. forces captured Nicolas Maduro and replaced him with Delcy Rodriguez.
Experts say Congress never gave the Office of Strategic Capital, the Pentagon arm initially tied to the investment, the power to buy stakes in companies. A Pentagon spokesperson told Reuters in August that the office “does not take equity stakes in private companies.” In a written briefing to the armed services committees, the Pentagon said it actually holds warrants, which are rights to buy shares later, rather than the shares themselves.
The stake will reportedly be held by a separate Pentagon office whose mission is shoring up the defense industrial base and has nothing to do with oil.
Phil Gunson of the International Crisis Group said major oil firms and investors are privately keeping their distance.
“It’s the opacity of the agreement that has serious investors concerned,” he said.
The Guardian’s investigation also found that Venezuelan crude won’t help refill the U.S. Strategic Petroleum Reserve any time soon, despite Trump’s promises.
At the center of the deal sits the company’s owner, Alejandro Betancourt Lopez, who has been pulled into several international corruption inquiries but has never been charged with a crime. His lawyer denied that Betancourt ever sought or encouraged bribes. Secretary of State Marco Rubio has said the U.S. had no investigation into him.
Former U.S. diplomat John Feeley offered a blunt comparison.
“The deal is like the big beautiful wall that Mexico will pay for,” he said.
The Guardian noted Trump’s comments at the United Nations earlier this week remained defiant.
“It was a war, but it’s perhaps the biggest deal ever made,” he said. “To the victor belong the spoils.”
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