US President Donald Trump has boasted that his sweeping oil accord with Venezuela — effectively giving the US control over much of the nation's crude wealth — is possibly "the greatest deal ever made."
Some US oil executives beg to differ.
Indeed, the arrangement has caused a wave of unease and alarm among industry leaders who worry it short-circuits ongoing commercial talks and cuts them out of some of Venezuela's most prospective targets.
Those concerns were described to Bloomberg by people familiar with the matter who asked not to be identified in order to speak more candidly. Some acknowledged the difficulty of publicly criticising the pact, given the president's obvious enthusiasm for it, eight months after US forces stormed Caracas and captured longtime President Nicolás Maduro in an operation Trump proclaimed a massive opportunity for US oil companies.
Energy company interest in reviving Venezuela's badly degraded oil industry culminated in a ceremony in Caracas on Wednesday attended by the country's acting President Delcy RodrÃguez, US Energy Secretary Chris Wright and the bosses of energy companies including Chevron Corp., Eni SpA and GE Vernova Inc. who signed investment accords.
But those agreements, months in the making, were overshadowed by the deal that Trump announced on his social media platform last Friday. The US government is taking a 35% stake in North American Blue Energy Partners, a private oil company led by controversial investor Alejandro Betancourt, which has secured 100-year rights to develop 17 Venezuelan oil fields.
NABEP's Venezuela Contracts Included in US Deal
Photo Credit: (Photo: Bloomberg)
The Betancourt arrangement, marshaled by the US State Department and the Pentagon, blindsided many energy companies and leaders, including those already engaged in commercial talks in Venezuela, according to some people familiar with the matter.
The industry's disquiet underscores a challenge for the Trump administration as it seeks to achieve competing priorities in Venezuela. While the president wanted to rapidly secure business transactions — and new flows of oil and revenue that can help rebuild the nation — some of the major developers best able to boost output of the country's heavy crude have been moving more cautiously, wary of continued political and economic risk in the wake of Maduro's capture.
Supporters of Trump's tie-up say it will help deliver more crude flows right away; to the president's backers, some of the grumbling has the tinge of criticism from sore losers who were moving too timidly.
Still, with the US taking a 35% stake in NABEP and securing a right to 20% of its production at cost, the Trump administration has created another worry: that it's effectively supercharging a defacto national oil company that competes with US oil producers, even those with no desire to step foot in Venezuela.
"When the government takes an equity investment in a private company, it has an incentive to try to preserve that investment," said Kevin Book, managing director at Washington-based ClearView Energy Partners. "The question is whether or not it does so in a way that's complementary with the rest of the industry — or competitive with it."
Administration officials have sought to assuage some oil industry concerns, casting the arrangement with NABEP as providing more security for private-sector transactions in Venezuela, said some people familiar with the matter.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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