Trump’s plan to secure access to Venezuelan oil reserves is prompting caution among major producers concerned about legal uncertainty, competition and the deal’s structure.
WEBDESK – REUTERS – Mediabites.com.pk
HOUSTON — A landmark U.S. agreement to gain access to a significant share of Venezuela’s vast oil reserves is raising concerns among some major energy companies considering investments in the South American country, according to sources familiar with the discussions.
The arrangement, outlined in a White House fact sheet, would give private oil company North American Blue Energy Partners (NABEP) a 100-year lease covering 17 Venezuelan oilfields containing an estimated 65 billion barrels of reserves. Under the proposed structure, the United States would take a 35% equity stake in NABEP’s corporate parent, receive 20% of production and retain the right of first refusal to buy the remaining output.
The central role of Venezuelan businessman Alejandro Betancourt in NABEP has unsettled some potential investors, Reuters reported. Betancourt has faced investigations by U.S. and European authorities related to previous dealings with the Venezuelan government but was never charged and has denied allegations against him.
One person involved in preparations for energy contracts expected to be signed this week said some major oil companies want assurances that they would not be required to work alongside Betancourt.
NABEP, which currently produces about 170,000 barrels of oil per day, has said it aims to increase output to more than 1 million barrels per day in the near term.
The concerns underscore the challenge facing President Donald Trump as his administration seeks to attract large-scale investment capable of rapidly expanding Venezuela’s oil production.
Major U.S. producers ExxonMobil and ConocoPhillips could be crucial to achieving those ambitions because of their technical expertise and financial resources. However, both companies left Venezuela after their assets were nationalized in 2007 under former President Hugo Chavez.
They have since stressed the importance of legal certainty, stable policies and respect for contracts before considering a major return.
Trump said this week that Exxon was among companies moving into Venezuela, though he did not provide details. ExxonMobil declined to comment, while ConocoPhillips referred to its earlier position that investment decisions would depend on factors including policy stability and adherence to the rule of law.
Analysts also questioned whether the proposed NABEP structure could create an unusual competitive dynamic by placing the U.S. government in a position that overlaps with private oil companies operating in Venezuela.
Alejo Czerwonko, chief investment officer for emerging markets at UBS, said significant investment and expertise from companies such as Exxon and ConocoPhillips would be needed to substantially increase Venezuelan output.
“There’s still a lot of unknowns and confusing elements,” Radhika Bansal, a senior vice president at Rystad Energy, said.
Despite the uncertainty, several companies are moving forward with Venezuelan projects. Chevron, Italy’s Eni, India’s ONGC, Colombia’s GeoPark and GE Vernova are expected to sign agreements for energy projects, while Shell and BP have received licenses for major offshore gas developments.
Those agreements are separate from the NABEP arrangement and reflect broader efforts to revive Venezuela’s energy industry following sweeping reforms designed to attract foreign investment.
The success of Trump’s broader strategy, however, may ultimately depend on whether Washington and Caracas can provide the legal protections and commercial clarity needed to persuade the world’s largest oil companies to commit billions of dollars to Venezuela’s long-neglected petroleum sector.
