If the Venezuela deal brokered by Trump succeeds, the Pentagon will acquire a substantial ownership stake in an obscure private oil firm that controls more crude reserves than the entirety of ExxonMobil's global portfolio. This arrangement comes eight months after the United States used a military raid to topple former Venezuelan President Maduro and absorbed the remnant government led by interim President Rodriguez.

The Rodriguez administration has granted century-long extraction rights for 17 Venezuelan oil fields to North American Blue Energy Partners (NABEP), a Barbados-based entity. NABEP's chief executive, Alejandro Betancourt, is a controversial figure who has been scrutinized for his past business dealings.

According to deal terms released by the White House this week, NABEP has transferred 35% of its equity to the Pentagon's Office of Strategic Capital at no cost to American taxpayers. The White House states that this arrangement grants the U.S. majority control over Venezuela's 65 billion barrels of proven crude reserves, roughly 20% of the country's estimated 303 billion barrels in total resources.

Patrick Ruti, global intelligence director at energy research firm Enverus, noted that if the White House data is accurate, NABEP would rank as the world's second-largest oil company by proven reserves, trailing only Saudi Aramco. Ruti says its scale is approximately four times that of ExxonMobil's reserves.

The Trump administration has acquired corporate ownership at a pace unseen in modern history, particularly for a Republican administration, with such moves typically reserved for world wars or major crises like depressions and recessions. The government argues that these transactions are essential for securing resources critical to national security.

Taylor Priest, a petroleum industry historian at the University of Iowa, says it is difficult to find historical precedent for the U.S. government directly holding equity in an oil company, let alone one operating oilfields in a foreign country. Priest notes that during World War II, the U.S. considered direct control over a Saudi Arabian oil concession but abandoned the idea due to industry opposition. He also mentioned that Congress nearly created a federal oil company in 1976, but the vote fell short by a narrow margin.

Priest describes the Venezuela agreement as seemingly without precedent. "The U.S. government partnering with a concession holder of dubious reputation in a country known for widespread corruption raises every red flag imaginable," he said.

A state-run enterprise

Beyond the Pentagon's equity stake, the State Department has the authority to purchase 20% of NABEP's oil production at production cost rather than market prices. The agency also holds a right of first refusal on the remaining 80% of NABEP's output. Additionally, the U.S. government can veto appointments to NABEP's board, and a majority of board members must be American citizens. The agreement with NABEP is governed by U.S. law and subject to U.S. court jurisdiction.

"This is entirely a state-owned enterprise," says Scott Lincicome, an international trade law expert at the Cato Institute. "De facto control over 100% of output at cost prices—that is ownership."

The White House says oil purchased under preferential terms will help replenish the Strategic Petroleum Reserve and "provide supplies for military and other sensitive uses." A U.S. official told reporters on a Tuesday call that the Trump administration does not expect to exercise its right of first refusal on the remaining 80% of NABEP production. The official, who spoke on condition of anonymity to freely discuss the deal, described the right of first refusal as a long-term insurance policy that the U.S. would activate during a crisis. The official said the deal is "first and foremost about geopolitics."

Big oil hesitates

Energy Secretary Chris Wright said Wednesday that the Trump administration's goal is to bolster investor confidence in Venezuela through a U.S. government presence, thereby encouraging private investment. Wright said the NABEP deal "does not replace or substitute private companies" and that the U.S. government "will not be the operator or producer of Venezuela's reserves."

Washington chose to partner with NABEP because most American oil giants are hesitant to invest in Venezuela, following the nationalization of the country's industry assets by the socialist government in Caracas in 2007. ExxonMobil Chief Executive Darren Woods told Trump during a January White House video conference that Venezuela was "uninvestable." ConocoPhillips Chief Executive Ryan Lance said in February that the company has no plans to return to Venezuela until it recovers funds owed by Caracas.

Chevron is the only American oil major active in Venezuela. It announced a separate deal this week to invest $7 billion, more than doubling its production in the country by 2031.

"This entity exists because of a lack of private investment interest in Venezuela," Lincicome said of the NABEP deal. "I find it hard to see how private capital will now flood in."

Betancourt's track record

U.S. officials say the Trump administration partnered with NABEP because its chief executive is a "fine oil operator" who has "been helpful to the U.S. government in the past." However, Betancourt has faced money laundering and corruption allegations. He has not been charged with a crime and denies any wrongdoing.

When asked about Betancourt's history, the U.S. official told reporters: "I'm not here to nominate anyone for sainthood." The official noted the chief executive faces no charges in the U.S. for violating American law. "This individual is particularly a proven oil operator, and we believe that with his knowledge of the industry, he can bring these fields to production capacity, generating the necessary oil revenue to lift Venezuela out of two decades of hardship," the U.S. official said.

NABEP claims that Betancourt has increased its Venezuelan output from 18,000 barrels per day to over 200,000 barrels. According to a company statement, this makes NABEP the second-largest private oil producer in Venezuela. NABEP says the deal will bring nearly $100 billion in investment to Venezuela's oil industry, with a near-term goal of boosting production to over one million barrels per day.

Questions over legality

But the U.S. government's partnership with NABEP faces legal and political uncertainties that cast a shadow over the deal's long-term viability.

"Like other equity transactions, the Trump administration seems to have articulated no legal basis or rationale for why they believe they can do this," said Peter Harrell, who served as international economics adviser on the National Security Council under President Joe Biden.

The administration's statements have created confusion. Before the deal was announced, the Pentagon had said that "the Office of Strategic Capital (OSC) does not hold equity in private companies." The White House then confirmed Monday that OSC would receive 35% of NABEP shares under the agreement. A U.S. official subsequently told reporters on Tuesday's call that "the equity structure is arranged in line with the statutory authority granted to the Office of Strategic Capital."

Bob McNally, president of Rapidan Energy Group, says the deal would at minimum be reconsidered, or possibly terminated outright, if a Democrat wins the 2028 presidential election. McNally also notes that a future Venezuelan regime could tear up the agreement even if the next U.S. president is a Republican. "The U.S. goal is to de-risk private long-term investment, but significant political risks in both Washington and Caracas will limit the program's effectiveness," McNally said.

Sina cooperation major platform futures account opening, safe and fast with guarantee.