U.S. Takes 35% Stake in Venezuelan Oil Firm NABEP
North American Blue Energy Partners now holds 17 oilfield concessions in Venezuela, and the U.S. government owns 35% of the company.
North American Blue Energy Partners now holds 17 oilfield concessions in Venezuela, and the U.S. government owns 35% of the company. The deal was announced by President Donald Trump last week. It gives Washington preferential access to 20% of NABEP’s production at cost. The State Department also holds the right of first refusal to buy the remaining 80%.
Fourteen of those projects are newly granted by Venezuela’s interim authorities. Five were previously operated by Chinese companies. One was run by a Russian firm. Two of the Chinese-linked projects belonged to China Concord Resources, sanctioned by the U.S. in 2019 for Iran-related activity. Another project was operated by Sinopec. Another by China National Petroleum Corp. Two more were tied to affiliates of Alex Saab, a former close associate of ousted Venezuelan President Nicolas Maduro who is currently in U.S. custody. One oilfield was linked to a nephew of Maduro’s wife, Cilia Flores.
NABEP was previously owned by U.S. oil tycoon Harry Sargeant. It is now controlled by Venezuelan businessman Alejandro Betancourt. His family runs Venezuela’s second-largest private oil producer. Betancourt said in a statement that “Venezuela is blessed with abundant resources, hardworking people, and untapped potential.” An unnamed official told Reuters that “U.S. gains market access for Venezuelan oil previously shipped to China.”
Trump told reporters the U.S. is taking out “millions and millions of barrels of oil” that is currently being shipped to refineries in Texas and Louisiana. Last week, he announced that the U.S. had secured access to some 64 billion barrels of Venezuela’s proven oil reserves through a partnership with private business. The White House later updated that figure to 65 billion barrels in a fact sheet released Monday.
The structure of the deal is unusual. The Pentagon’s Office of Strategic Capital holds the 35% equity stake in NABEP’s corporate parent. The State Department orchestrates the 20% production access at cost. NABEP retains operating control. The company plans to invest up to $100 billion in new oil infrastructure in Venezuela, according to the White House. Over the first 25 years, NABEP is expected to pay $200 billion in royalty and tax payments to Venezuelan authorities.
This is not the first time Washington has reached for foreign oil in a hurry. The Strategic Petroleum Reserve was built after the 1973 embargo. It was drawn down during the Gulf War. It was tapped again in 2022 after Russia invaded Ukraine. Each time, the logic was the same. Secure supply when the market tightens. This deal goes further. It takes an equity stake in a foreign producer. It locks in a guaranteed share of output. It gives the U.S. government the first right to buy whatever is left.
The timing matters. The announcement came on a Friday. The detailed terms were released on Monday. Between those two dates, crude prices moved. Gasoline futures moved. No one said why. Markets do not like uncertainty. They like it even less when the uncertainty is wrapped in geopolitical language.
Venezuela’s oil sector has been battered for years. Production fell from more than 3 million barrels per day in the late 1990s to under 700,000 barrels per day by 2020. Sanctions on Maduro’s government tightened in 2019. They were eased in late 2022 to allow Chevron to resume limited operations. The new deal expands that opening dramatically. It also raises questions about sovereignty and the legitimacy of Venezuela’s interim authorities. Talks between those authorities and representatives of the 2015 National Assembly are aimed at restoring constitutional order and addressing legal questions surrounding the country’s transition.
Some major producers are watching closely. Reuters reported on Tuesday that Trump’s plan risks derailing Venezuela’s oil recovery by stifling competition and deterring foreign investment. The logic is simple. If one company holds 17 fields and the U.S. government holds a stake in that company, other investors may wait. They may ask what happens when politics shift. They may ask what happens when the 100-year concession runs into a new administration. I have seen deals like this before. They work until they do not.
The numbers are large. 64 billion barrels. 65 billion barrels. 17 projects. 35% stake. 20% production at cost. Large numbers are easy to announce. They are harder to produce. Venezuela’s oil is heavy and sour. It requires blending with lighter crude to run through most U.S. refineries. The infrastructure to extract and transport it has decayed. NABEP says it will invest $100 billion to fix that. That is a plan. It is not a result.
I count the money twice. The U.S. government is putting its name on a foreign oil company. It is taking a minority stake. It is securing a guaranteed share of output. It is positioning itself as the priority buyer for the rest. This gives Washington leverage. It also gives Washington exposure. If production stalls, the exposure shows up. If prices fall, the exposure shows up. If politics in Venezuela shift, the exposure shows up faster.
Markets will price this in stages. First, the announcement. Then, the terms. Then, the actual flow of barrels. The first two stages are done. The third stage is where deals are tested. I have watched markets for thirty years. The pattern is always the same. Excitement comes first. Reality comes later. The money is counted twice because the first count is always wrong.