The Donald Trump administration is planning to take a 35% passive stake in Venezuelan businessman Alejandro Betancourt’s North American Blue Energy Partners, reported the Wall Street Journal on Saturday (August 30).
As per the media outlet, Washington is also planning to secure preferential rights to purchase 20% of the company’s production at cost.
The Pentagon’s Office of Strategic Capital plans to structure the investment through penny warrants that would provide the US government with equity ownership in the business without requiring significant capital investment.
The report emerged immediately after President Donald Trump announced that the US would take control of a fifth of Venezuela’s vast oil reserves.
There are also reports about American energy giant Chevron looking to finalise negotiations to migrate all its oil joint ventures in the Latin American country into the country’s new energy framework, allowing the venture more control over operations and key oilfield expansions.
The agreement will reportedly include a previously announced asset swap allowing the company’s Petropiar heavy crude project, its largest in Venezuela, to expand to the neighboring Ayacucho 8 block.
“A second area in the vast Orinoco Belt also is involved in the negotiations to expand a smaller project there,” reported Reuters.
Chevron, Venezuela’s oil ministry, and the state-run PDVSA have also held talks for a potential new oil area that could be added to the portfolio.
Coming back to the Trump administration’s plans of “taking control” of Venezuela’s oil reserves, the Republican only stated about the US securing majority control of more than 65 billion barrels of the oil originating in the Latin American nation through a partnership with private business.
While Trump refused to disclose procedural details surrounding what he called the “biggest deal in world history,” he said that the Venezuelan oil will be used to replenish the “Strategic Petroleum Reserve,” which has been drawn down sharply recently to respond to global supply disruptions and high fuel prices.
As per the Republican, the “topping out” process will begin shortly, describing the Venezuelan oil as a “gift from Venezuela to the people of the United States.”
While a section of the analysts see the deal potentially reviving Venezuela’s sanctions-battered oil industry, they also warn that the effort will require significant investment and infrastructure work before production can rise substantially.
Meanwhile, US’ Strategic Petroleum Reserve, as of August 21, held about 290 million barrels, near a 44-year low, after the Washington drew down its stockpile under both the Joe Biden and Trump administrations in response to global supply disruptions, including Russia’s invasion of Ukraine and the Iran war.