Key Takeaways:
The White House has handed the Pentagon a 35 percent stake in a private company granted 100-year rights to 65 billion barrels of Venezuelan oil.
The US government will hold a 35 percent equity stake in a company controlling 65 billion barrels of Venezuelan crude, as the White House unveiled the structure of what it calls the biggest oil deal in history. The agreement, signed by Secretary of State Marco Rubio and Defense Secretary Pete Hegseth, gives the US Office of Strategic Capital an equity position in North American Blue Energy Partners, or NABEP, a privately held company majority-owned by Venezuelan businessman Alejandro Betancourt.
"This deal secures our energy dominance for the next century — all at zero cost to the United States," the White House said in a factsheet released Monday. The agreement will forge "robust, strategic and defensible supply chains in our hemisphere," effectively pushing out Russian and Chinese companies, it added.
Venezuela's interim authorities granted NABEP 100-year concessions for 17 oil fields holding roughly 65 billion barrels of proven reserves, about one-fifth of the country's total. The State Department secured the right to purchase 20 percent of NABEP's output at production cost to refill the Strategic Petroleum Reserve, plus right of first refusal on the remaining 80 percent. NABEP, which currently pumps more than 200,000 barrels a day, plans to invest up to $100 billion in new infrastructure and targets near-term production above 1 million barrels a day, with Venezuela's acting President Delcy Rodríguez citing an ultimate goal of 1.5 million.
The deal reshapes control of the world's largest proven oil reserves, removing assets previously operated by Russian and Chinese firms — including fields run by China Concord Resources, Sinopec and PetroChina — or by associates of former Presidents Nicolás Maduro and Hugo Chávez. Venezuela expects $200 billion in royalties and taxes over the first 25 years, while the US gains a guaranteed Western Hemisphere supply source. The US also holds veto power over NABEP board appointments, with a majority of directors required to be US citizens, and the agreement is governed by US law.
The arrangement has drawn criticism from American and Venezuelan political figures. Sen. Jack Reed, ranking Democrat on the Senate Armed Services Committee, called it "a blatant abuse of power and taxpayer dollars." Some Rodríguez opponents have described it as an "asset grab" and questioned the legal basis for handing the US government a stake in a large share of the country's oil reserves.
Betancourt's central role is also unsettling some oil companies evaluating investments in Venezuela. "Oil majors and large foreign companies negotiating contract migrations want to make sure they will not be seated at the same table with Betancourt," one person involved in preparations for energy contract signings told Reuters. Betancourt has previously been investigated by US and European authorities over past dealings with the Venezuelan government, though he was never charged and has denied wrongdoing.
ExxonMobil and ConocoPhillips, both of which left Venezuela in 2007 after nationalization under Chávez, have said their conditions for legal certainty have not yet been met, though Trump said Monday that Exxon was among companies entering Venezuela. Chevron, Eni, ONGC, GeoPark and GE Vernova are on track to sign their own Venezuela energy agreements this week.
Oil industry analysts caution that the deal is unlikely to lower prices at the pump any time soon. It could take years — or more than a decade — for new Venezuelan production to reach US markets, as the country's energy infrastructure needs rebuilding and its crude tends to be heavy and sour, making it harder to refine than the light, sweet crude found in the United States. The US consumed about 20.6 million barrels of petroleum daily last year, according to government figures.
Rodríguez has defended the deal as a chance to modernize Venezuela's oil sector while insisting national sovereignty remains intact. The White House framed the agreement as part of a reassertion of the Monroe Doctrine, the 200-year-old US policy warning outside powers against interference in the Western Hemisphere. Whether the deal survives the political and legal challenges ahead will determine whether the US can translate its military removal of Maduro in January into a durable energy foothold in the hemisphere.
This article is for informational purposes only and does not constitute investment advice.
