Trump's oil deal with Venezuela raises red flags for some major producers
HOUSTON: An unprecedented deal for the US to gain access to a fifth of Venezuela’s oil reserves - and the central role a Venezuelan businessman will play - is prompting questions and hesitation from some oil companies evaluating potential investments in the country, sources familiar with the situation told Reuters.
An unprecedented US deal allows private firm North American Blue Energy Partners (NABEP) to lease 17 Venezuelan oilfields containing approximately 65 billion barrels of oil reserves for 100 years. The US will receive a 35% equity stake in NABEP, guarantee a 20% share in oil production, and have first refusal on all remaining production.
Venezuelan businessman Alejandro Betancourt leads NABEP, whose ownership and activities have been under scrutiny by US and European authorities. Betancourt has denied allegations against him. Major oil companies, including ExxonMobil and ConocoPhillips, are hesitant to invest in Venezuela due to concerns about legal certainty and adherence to the rule of law with Betancourt involved.
Despite the red flags, Chevron, a major US oil producer in Venezuela, remains actively negotiating contracts for energy projects. Chevron aims to secure new blocks in the Orinoco Belt and explore new areas for diluent production. Other companies, such as Eni, ONGC, GeoPark, and GE Vernova, are also working on agreements in Venezuela.
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