Trump’s oil deal with Venezuela raises red flags for some major producers, sources say

The White House Fact Sheet and Terms of the NABEP Agreement

The Trump administration released a detailed fact sheet outlining a private joint venture with North American Blue Energy Partners (NABEP), an enterprise owned by Venezuelan businessman Alejandro Betancourt. NABEP currently operates as the second-largest operator in Venezuela, trailing only Chevron. Under the agreement, acting Venezuelan President Delcy Rodríguez is awarding the company a 100-year concession across 17 oil fields possessing proven reserves of 65 billion barrels. The White House noted that many of these specific fields were previously controlled or operated by Russian and Chinese firms, or by corrupt cronies of former presidents Nicolas Maduro and Hugo Chavez.

The structural layout of the arrangement grants the Pentagon’s Office of Strategic Capital a 35 percent ownership stake in the parent company. Additionally, the U.S. State Department secured a guarantee to purchase 20 percent of the output at cost, while holding a right-of-first-refusal on remaining production. The White House asserted that the agreement would be established at zero cost to the U.S. government, which will retain veto power over board members—a majority of whom must be U.S. citizens.

Industry Hesitation and the Shadow of Past Expropriations

Despite the grand scale of the pact, major international oil producers are expressing deep reservations. Sources familiar with negotiations told Reuters that the central role assigned to Betancourt—who has faced past investigations by U.S. and European authorities without ever being formally charged, and who has denied all allegations—is causing friction among potential investors. 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 an individual involved in preparations for upcoming energy contract signings.

The deal also underscores the immense hurdles the administration faces in convincing industry giants like ExxonMobil and ConocoPhillips to return to Venezuela. Both corporations exited the country in 2007 following the nationalization of their assets by Hugo Chavez, later securing successful legal judgments for compensation. Representatives for both companies emphasize that strict requirements regarding contract sanctity and legal certainty must be met. UBS analysts pointed out in an August 31 report that any significant investment demands a legal framework capable of surviving future shifts in political leadership in both Washington and Caracas. Furthermore, energy analysts at UBS and Rystad Energy noted that the U.S. government effectively positioning itself as a commercial competitor in Venezuela could deter private energy firms from committing capital.

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“From a U.S. oil company’s perspective, any significant investment in Venezuela would generally need to be accompanied by a legal framework that could survive a change in leadership in both the U.S. and Venezuela.”

UBS analysts

Production Timelines and the Reality of Gasoline Prices

While President Trump asserted that the pact will substantially lower gas prices for all Americans, long into the future, energy experts and market analysts advise consumers to temper expectations. National average gasoline prices stood at $4.08 per gallon on Monday, driven higher by the war in Iran. Energy analysts emphasize that repairing Venezuela’s dilapidated infrastructure will take considerable time. According to Global Energy Monitor, newly discovered or developed fields can require up to 15 years to yield production.

Hilltower Resource Advisors CEO Tracy Shuchart estimated that five to 15 years will pass before sufficient crude flows to the U.S. to influence domestic pump prices. GasBuddy petroleum analyst Patrick De Haan echoed that sentiment in a research note, calling the agreement a long-term signal of White House concern over fuel costs rather than a near-term fix.

Capitol Hill Reactions and Separate Energy Migration Deals

“President Trump’s effort to turn the U.S. military into an investor in Venezuelan oil is a blatant abuse of power and taxpayer dollars.”

Sen. Jack Reed, the top Democrat on the Senate Armed Services Committee

While the NABEP joint venture commands headlines, other international energy firms are pursuing more conventional pathways in Venezuela. Chevron, which maintained its operational footprint in the country, is the largest U.S. oil producer in Venezuela.