White House reveals details of Trump's Venezuela oil deal with NABEP

White House unveils details of Venezuela oil agreement

The White House has released new details of President Donald Trump's agreement with North American Blue Energy Partners (NABEP), a private oil firm controlled by Venezuelan businessman Alejandro Betancourt, according to a fact sheet issued late Monday. The deal, which Trump announced over the weekend as the "biggest oil deal in world history," will give the Pentagon's Office of Strategic Capital a 35 percent ownership stake in the company, as reported by Al Jazeera and Greater Kashmir.

The arrangement, signed by Defense Secretary Pete Hegseth and Secretary of State Marco Rubio, also guarantees the US a right to buy 20 percent of the oil output at cost, orchestrated through the State Department, the White House disclosed. The US will hold a right-of-first-refusal to purchase all remaining output, according to The Canberra Times.

Venezuela's acting President Delcy Rodriguez is granting NABEP 100-year rights over 17 oil fields with proven reserves of 65 billion barrels, as reported by Al Jazeera and Greater Kashmir. Many of those fields were previously owned by Russian or Chinese firms, the White House said, according to Greater Kashmir.

Betancourt's company has agreed to invest $100 billion in new oil infrastructure, the White House said, as reported by Al Jazeera and Greater Kashmir. The White House claimed the deal would be "at zero cost" to the US and said the government would have veto power over board members, the majority of whom would be US citizens, according to Greater Kashmir.

Deal structure and ownership

The US is creating a private company as part of a joint venture with NABEP, a detail the White House withheld for days, as reported by Greater Kashmir. NABEP, which produces around 170,000 barrels of oil a day, is already the second-largest operator in Venezuela behind Chevron, according to The Canberra Times and Greater Kashmir.

Fortune reported that the US Department of Defense would own a 55% stake in the oil production, a figure that differs from the 35 percent ownership stake cited by Al Jazeera and Greater Kashmir. The White House fact sheet, as described by The Canberra Times, outlined a 35 per cent equity stake in the corporate parent company.

Betancourt, who controls NABEP with his family, has been the subject of investigations by US and European authorities following past dealings with the Venezuelan government, although he was never charged, according to The Canberra Times and Fortune. He has previously denied allegations against him, The Canberra Times reported. Fortune noted that his bank accounts have been under investigation in Switzerland for years, but he has not been formally charged with any crimes.

In an emailed statement, Betancourt said the transaction would "unleash that potential to the great benefit of both Venezuelans and Americans," as reported by The Canberra Times and Al Jazeera. He also said Venezuela is "blessed with an abundance of natural resources, hardworking people and untapped potential," according to Al Jazeera.

Industry reaction and concerns

The deal has been met with skepticism from analysts who say it will take years to revive Venezuela's production, as reported by Greater Kashmir. Gregory Brew, senior energy analyst with the Eurasia Group, told Fortune: "If the S. scheme in Venezuela sounds colonial, that's because it is. This is the Trump administration trying to increase S. revenue from Venezuelan oil production. It's extremely unusual. It's probably unprecedented in the history of the international oil industry."

The planned structure and the massive assets NABEP could accumulate in the OPEC country are raising concerns that American oil companies could face competition from the US government itself in Venezuela, according to The Canberra Times. Alejo Czerwonko, chief investment officer of emerging markets for UBS, said that could add more obstacles to Trump's goal of increasing Venezuela's oil output and exports to boost US reserves, The Canberra Times reported. "You would need sizable investment and know-how from the likes of Exxon and ConocoPhillips," Czerwonko said.

A person involved in preparations for an event where energy contracts are expected to be signed this week said: "Oil majors and large foreign companies negotiating contract migrations want to make sure they will not be seated at the same table with Betancourt," as reported by The Canberra Times.

ExxonMobil declined to comment after Trump said it was going into Venezuela, The Canberra Times reported. ExxonMobil and ConocoPhillips left Venezuela in 2007 after their assets were nationalised by the government of former President Hugo Chavez, and both have repeatedly said that their requirements of legal certainty and contract sanctity have not yet been met to re-enter the country, according to The Canberra Times. A ConocoPhillips spokesperson referred to an earlier statement that said any investment decision would be guided by a number of factors, including policy stability and adherence to the rule of law, The Canberra Times reported.

Strategic context

Trump has been pushing to boost oil production in Venezuela since the January military mission that captured then-President Nicolás Maduro on federal narcoterrorism and drug trafficking charges, as reported by Greater Kashmir. Trump acknowledged that US consumers would not immediately see a change in petrol prices, according to Al Jazeera. He said the deal would help refill US strategic oil reserves, which have been drawn down due to the war on Iran, Al Jazeera reported.

Fortune reported that the Strategic Petroleum Reserve is now drained down to 286 million barrels, its lowest point since 1982. The SPR was at 415 million barrels when the Iran war began and at 638 million barrels when Biden took office in 2021, according to Fortune.

Venezuelan oil production has risen this year from just under 1 million barrels per day to more than 2 million barrels daily, an increase of almost 250,000 barrels each day, Fortune reported. NABEP has a near-term goal of increasing production to more than one million barrels per day, according to The Canberra Times.

Former US government energy advisers have cautioned that the deal comes with political risk, since future administrations in Venezuela or the United States could challenge the deal, as reported by Greater Kashmir. Rodriguez said the deal would involve an investment of more than $100 billion and generate more than $209 billion in tax revenues for Venezuela, according to Fortune.