Venezuela oil deal raises trouble not capital
XLE•Context news on the deal
U.S. President Donald Trump on August 28 unveiled a deal on social media that puts 65 billion barrels of recoverable oil in Venezuela under majority control of the United States.
Venezuela’s interim President Delcy Rodriguez confirmed the arrangement, saying it calls for the development of 17 fields, investment of more than $100 billion, and some $200 billion in tax revenue for her country.
The U.S. government plans to take a 35% stake in North American Blue Energy Partners, a company run by Venezuelan businessman Alejandro Betancourt, and secure preferential rights to buy 20% of its production at cost, the Wall Street Journal reported on August 29. The Pentagon’s Office of Strategic Capital intends to structure the investment through penny warrants, it added.
Trump also said on Truth Social that he would use Venezuela's oil to refill the U.S. Strategic Petroleum Reserve, a process that would begin shortly.
Reuters production notes
(Editing by Jeffrey Goldfarb; Production by Maya Nandhini)
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Breakingviews column on the Venezuela oil deal
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Robert Cyran
NEW YORK, Aug. 31 (Reuters Breakingviews) - The U.S. is taking control of 65 bln barrels, perhaps using the Pentagon to help refill its strategic petroleum reserve. The arrangement doesn't look politically durable in either country, among myriad other problems. Good luck getting oil giants like Exxon to invest $100 bln.
