Pentagon Takes 35% Stake in Venezuelan Oil Venture After U.S. Concessions
The U.S. Department of Defense has received a 35% equity stake in North American Blue Energy Partners, which holds concessions to 17 Venezuelan oilfields, giving Washington control over a portion of the country's crude reserves.
The Pentagon's Office of Strategic Capital has been granted a 35% ownership stake, at no cost to taxpayers, in North American Blue Energy Partners (NABEP), a private firm that received 100-year concessions to 17 oilfields in Venezuela from the interim government of Delcy Rodríguez. The arrangement, announced by the White House, would give the United States majority control over roughly 65 billion barrels of proven Venezuelan crude, about one-fifth of the country's estimated reserves.
Under the deal, the State Department can purchase 20% of NABEP's oil output at production cost and holds a right of first refusal on the remaining 80%. The U.S. government also retains veto power over board appointments, and a majority of the board must be U.S. citizens. Officials say the oil secured on favorable terms will be used to replenish the Strategic Petroleum Reserve and support military and other sensitive needs.
"This is straight up a state-owned enterprise," said Scott Lincicome, an international trade-law expert at the Cato Institute, noting that the arrangement gives the United States de facto control of the output. Energy Secretary Chris Wright emphasized that the partnership is intended to encourage private investment in Venezuela by providing a government backstop, not to replace private operators.
NABEP's chief executive, Alejandro Betancourt, a Venezuelan businessman who has faced investigations but no charges, is described by a U.S. official as a "good oil operator" who can help increase production. The company claims to have raised output from 18,000 barrels per day to over 200,000 barrels per day and aims to reach more than 1 million barrels per day, projecting nearly $100 billion of investment in Venezuela's oil sector.
The arrangement is unprecedented; historians note that direct U.S. ownership of a foreign oil company is rare. Legal scholars have raised questions about the statutory authority for the Pentagon to hold equity stakes, citing earlier Pentagon statements that the Office of Strategic Capital only provides loans or guarantees. Critics also point to the political risk, suggesting future administrations could reassess or terminate the deal.
Major U.S. oil majors remain hesitant to invest in Venezuela, with ExxonMobil labeling the country "uninvestable" and ConocoPhillips awaiting repayment of past debts. Chevron recently announced a separate $7 billion investment to expand its Venezuelan production.