Pentagon to take stake in oil joint venture with Caracas

The U.S. government could become a direct investor in a private venture controlling a majority stake in 65 billion barrels of Venezuelan crude, according to details reported by The Wall Street Journal.

The agreement, announced by Donald Trump, would bring Washington into the venture through the Pentagon. The reported structure would give the United States a passive 35% stake in North American Blue Energy Partners, or Nabep, and preferential rights to buy 20% of the company’s production at cost.

The Pentagon’s Office of Strategic Capital plans to use penny warrants, financial instruments that could provide an equity stake without requiring a significant capital investment. Nabep would be led by Alejandro Betancourt, a controversial Venezuelan businessman who has acted as an intermediary in energy deals and has close ties to Venezuela’s interim president, Delcy Rodríguez.

Betancourt has previously faced criminal investigations for alleged money laundering in Spain and Switzerland, although no charges were formally filed, the report said. Nabep has become Venezuela’s second-largest private oil producer after Chevron over the past two years, and the United States would enter the joint venture through that company.

Trump said the Venezuelan oil would help refill the National Strategic Reserves, which he claimed had been nearly emptied under Joe Biden, but he has not provided details of the agreement. Experts warn the arrangement could deter other U.S. oil companies by placing them in competition with a U.S.-backed private company. The deal has also prompted concern that a future Venezuelan government could successfully challenge it in court. Venezuela’s 1999 constitution says the country’s oil reserves belong to the Bolivarian Republic and cannot be sold.

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I will fill the National Strategic Reserves, which, because of sleepy Joe Biden, have been practically emptied.