President Trump and interim Venezuelan President Delcy Rodriguez announced a deal that would give the United States majority control over 17 oil fields holding more than 65 billion barrels of Venezuela's proven reserves.
The agreement would run through North American Blue Energy Partners (NABEP), the second-largest private Venezuelan oil producer. The U.S. Department of Defense would own a 55% stake in the oil production, according to the deal's terms.
'The deal more than doubles American oil reserves, dramatically increases domestic supply, and is projected to substantially lower gas prices for all Americans long into the future,' the White House said in a statement.
NABEP is controlled by Venezuelan businessman Alejandro Betancourt López and his family. López's bank accounts have been under investigation in Switzerland for years, though he has not been formally charged with any crimes, and he has cultivated close ties to both the Trump and Rodriguez administrations.
Gregory Brew, senior energy analyst with the Eurasia Group, called the structure unusual for the industry. 'If the U.S. scheme in Venezuela sounds colonial, that's because it is,' Brew said, adding that the closest historical parallel is the U.K.'s majority ownership of BP more than 50 years ago. Brew also said the arrangement 'looks like an insider deal to profit businessmen who are close to Delcy and who are also close to Trump and his inner circle.'
Rodriguez said the deal would bring more than $100 billion in investment and generate more than $209 billion in tax revenue for Venezuela, though the source of that capital remains unclear.
Chevron, the top private oil producer in Venezuela and the only major U.S. company that never left after the country's oil-asset expropriations almost 20 years ago, remains central to the arrangement. Smaller producers such as Hunt Oil are investing, but ExxonMobil and ConocoPhillips have stayed on the sidelines while they evaluate the opportunity.
Matt Reed, vice president of Foreign Reports, said the bigger test is whether top-tier capital follows. 'U.S. firms have the capital and technology Venezuela needs to reach its potential, but they also have reservations given the history and current circumstances,' Reed said. 'Those companies don't need sweetheart deals or financial aid from the Pentagon; they just need certainty.'
Venezuelan oil output has climbed from just under 1 million barrels per day to more than 1.2 million, an increase of almost 250,000 barrels daily, largely through Chevron's optimization of existing wells rather than new drilling.
The numbers come first, and they tell an uneven story. A deal that promises to more than double American reserves is being built on a Pentagon equity stake and a private partner whose finances are under foreign scrutiny — not exactly the transparent property rights that free enterprise runs on.
Capital rewards clear rules, and so far Exxon and ConocoPhillips are withholding judgment rather than capital. If Washington wants the lower gas prices it is promising the American taxpayer, the deal will need to survive years, two changes of administration, and a market test far tougher than a press conference in Caracas.
