KEY POINTS
- A White House deal gives NABEP a 100-year lease on 17 Venezuelan oilfields with about 65 billion barrels, with the US taking a 35 percent stake and 20 percent of output.
- NABEP owner Alejandro Betancourt’s central role is unsettling some majors, and sources warn US firms could end up competing with the US government.
- Chevron, Eni, ONGC, GeoPark and GE Vernova are on track to sign separate Venezuela deals this week under a broader energy reform.
Trump’s oil deal with Venezuela is raising red flags for some major producers, as an unprecedented US move to access a fifth of the country’s reserves and the central role of a Venezuelan businessman prompt hesitation over potential investments, sources told Reuters.
A White House fact sheet released late on Monday set out the terms. Specifically, private firm North American Blue Energy Partners would win a 100-year lease for 17 oilfields holding about 65 billion barrels. Moreover, the US would take a 35 percent equity stake in the parent company, secure 20 percent of production and hold a right of first refusal on the rest.
Businessman’s role unsettles majors
Venezuelan businessman Alejandro Betancourt controls NABEP, and he has faced US and European investigations over past dealings with the Venezuelan government, though authorities never charged him and he has denied the allegations. Consequently, some firms are wary. According to one person preparing a contract-signing event this week, oil majors negotiating migrations want to avoid sitting at the same table as Betancourt.
However, Betancourt struck an upbeat tone. He said the deal would unleash Venezuela’s potential to benefit both Venezuelans and Americans, while NABEP, which pumps about 170,000 barrels a day, cited a near-term goal above 1 million.
Government as a rival worries investors
Meanwhile, the structure itself troubles some players. Specifically, sources said the assets NABEP could amass raise the prospect that US companies would compete against the US government inside Venezuela. Therefore, that risk could complicate Trump’s push to lift the country’s output and refill American reserves.
According to UBS emerging-markets chief investment officer Alejo Czerwonko, the plan needs heavy investment and expertise from firms like Exxon and ConocoPhillips, yet luring them back looks hard. Indeed, both left in 2007 after nationalisations and still demand legal certainty. Trump said Exxon was going in, but Exxon declined to comment, and ConocoPhillips stressed rule of law.
Nevertheless, other deals are advancing. Chevron, Eni, ONGC, GeoPark and GE Vernova are on track to sign this week, separate from the NABEP arrangement, as dozens of companies migrate contracts under Venezuela’s energy reform.
