An unprecedented agreement giving the United States access to a fifth of Venezuela’s oil reserves, and the central role assigned to Venezuelan businessman Alejandro Betancourt, are prompting questions and hesitation among some oil companies considering investments in the country, according to sources familiar with the situation.
A White House fact sheet released late on Monday outlined an arrangement under which private oil firm North American Blue Energy Partners (NABEP) would receive a 100-year lease for 17 oilfields containing some 65 billion barrels of oil reserves. Under the structure, the U.S. will take a 35% equity stake in the corporate parent company, receive a guaranteed 20% of oil production and retain a right-of-first-refusal to purchase all remaining output.
The role of NABEP and its controlling shareholder, Betancourt, has become a particular point of concern for some companies. Betancourt has been the subject of investigations by U.S. and European authorities following past dealings with the Venezuelan government, although he was never charged. He has previously denied allegations against him.
“Oil majors and large foreign companies negotiating contract migrations want to make sure they will not be seated at the same table with Betancourt,” said a person involved in preparations for an event where energy contracts are expected to be signed this week.
NABEP, which produces around 170,000 barrels of oil a day, did not immediately respond to a request for comment. In an emailed company statement following the White House announcement, Betancourt said the transaction would “unleash that potential to the great benefit of both Venezuelans and Americans”.
The company said Betancourt had been in the Venezuelan oil industry for more than 15 years and had a consistent track record of success, most recently at the helm of NABEP, where he rapidly scaled production. It added that the company’s near-term goal was to increase production to more than 1 million barrels of oil per day.
The proposed arrangement nevertheless highlights the challenge facing President Donald Trump as he seeks to persuade major U.S. oil companies to invest in Venezuela and rapidly expand its oil production. ExxonMobil and ConocoPhillips, which left Venezuela in 2007 after their assets were nationalised by the government of former President Hugo Chavez, have repeatedly said that legal certainty and contract sanctity requirements have not yet been met for their return.
Trump told reporters on Monday that Exxon was among the companies going into Venezuela, without elaborating. ExxonMobil declined to comment. A ConocoPhillips spokesperson referred to an earlier statement saying investment decisions would depend on factors including policy stability and adherence to the rule of law.
The structure of the deal is also raising concerns that American oil companies could ultimately find themselves competing against the U.S. government itself in Venezuela. Alejo Czerwonko, chief investment officer of emerging markets for UBS, said that could create additional obstacles to Trump’s plans to increase Venezuelan oil output and exports.
“You would need sizable investment and know-how from the likes of Exxon and ConocoPhillips,” he said. “How do you lure these companies into the country?”
Radhika Bansal, a senior vice president at Rystad Energy, described the situation as containing “a lot of unknowns and confusing elements”.
There are, however, signs of broader corporate engagement. Chevron, the largest U.S. oil producer in Venezuela and a company that never left the country, along with Italy’s Eni, India’s ONGC, Colombia’s GeoPark and U.S. GE Vernova, are on track to sign agreements for energy projects in Venezuela this week.
Those agreements, as well as recently granted licences to Shell and BP for major offshore gas projects, are separate from the U.S. arrangement with NABEP. Most of these companies and dozens more have been negotiating since the beginning of the year to migrate existing Venezuelan contracts to new terms authorised under a sweeping energy reform that also encourages project expansions.
Chevron is seeking to add at least one new block in the vast Orinoco Belt to its portfolio and is also aiming to negotiate an area in Monagas North that could become a source of diluents for its extra-heavy oil output.
