US structured Venezuela oil position to protect it from dilution, official says
The concessions are awarded without a competitive process
A senior US official revealed on Thursday that the American government secured a 35 percent stake in a Venezuelan oil venture by issuing warrants, designed to prevent dilution of its ownership. These "penny warrants" granted to North American Blue Energy Partners (NABEP) provide the US with the right, but not the obligation, to purchase the equity at a low cost in the future.
The concessions, awarded without a competitive process, grant NABEP 100-year rights to 17 oilfields possessing an estimated 65 billion barrels of reserves. The structure was specifically devised to maintain US ownership levels while NABEP raises funds to support the project's capital requirements. The warrants will safeguard the US government from dilution until the project reaches maturity, ensuring the US government realizes the full value of the project once it begins producing at full capacity.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
