US to take 35% stake in Betancourt's oil venture, WSJ reports

The US government's plan to take a 35% passive stake in a Venezuelan oil venture would mark an unusual direct equity position in a foreign energy producer.

The US government plans to take a 35% passive stake in Venezuelan businessman Alejandro Betancourt's North American Blue Energy Partners, the Wall Street Journal reported, citing people involved in negotiating the deal.

"The Office of Strategic Capital does not take equity stakes in private companies," Sean Parnell, chief Pentagon spokesperson, said. "Under its statutory authority, OSC's role is strictly limited to providing capital assistance in the form of a loan, loan guarantee, or technical assistance."

The US also plans to secure preferential rights to purchase 20% of the company's production at cost, the WSJ reported. The Pentagon's Office of Strategic Capital plans to structure the investment through penny warrants that would yield the US equity ownership in the business without significant capital investment.

The report comes a day after President Donald Trump said the US would take control of a fifth of Venezuela's vast oil reserves, securing majority control of more than 65 billion barrels of the country's proven reserves through a partnership with private business.

The proposed structure would give Washington a passive ownership position in Betancourt's venture while avoiding the direct capital outlay a conventional equity purchase would require. Penny warrants, priced at a nominal amount, convert into shares and would let the US claim a 35% stake without committing meaningful upfront funds. The preferential right to buy a fifth of output at cost would effectively secure a discounted supply channel for Venezuelan crude.

A Departure From Sanctions-First Policy

The deal follows years of US sanctions that have crippled Venezuela's oil industry. Production has fallen from roughly 3 million barrels a day in the late 1990s to about 900,000 barrels a day in recent years, according to OPEC data, as sanctions and underinvestment took their toll. The last time Washington sought to reshape Venezuela's energy sector through direct engagement was the 2019 sanctions push against state oil company PDVSA, which cut off its access to US financial markets and froze its US assets.

The Pentagon's denial that OSC takes equity stakes raises questions about how the deal would be structured. Parnell's statement suggests the investment may be routed through a different mechanism, or that the warrants would be held by another US entity. The White House and North American Blue Energy Partners did not respond to requests for comment outside regular business hours.

For oil markets, the deal's significance lies less in immediate supply impact and more in what it says about US policy toward Venezuela. A US government equity position in a Venezuelan oil producer would represent a sharp departure from the sanctions-first approach of the past decade, potentially opening a path for broader investment in the country's energy sector. Venezuela's proven reserves of more than 65 billion barrels — among the largest in the world — have been largely untapped since sanctions took hold, leaving the country's output a fraction of its historical peak.

The arrangement also carries diplomatic weight. A US stake in a company tied to Betancourt, who has faced scrutiny over his business dealings, could complicate relations with Venezuela's government and other international players. How the deal is finalized, and whether the Pentagon's statutory limits force a restructuring, will determine whether Washington's entry into Venezuelan oil is a one-off or the start of a broader re-engagement.

This article is for informational purposes only and does not constitute investment advice.