Trump administration takes 35% passive stake in Venezuelan oil venture, gains preferential purchase rights

After the ouster of Venezuelan dictator Nicolás Maduro, President Donald Trump promised to make the South American nation "prosperous again." Eight months later, a clearer picture has emerged of how the Trump administration hopes to achieve this objective: by becoming a shareholder in a Venezuelan oil company.

The Agreement

Under an extraordinary agreement first reported by The Wall Street Journal on Saturday, the U.S. government is taking a 35 percent passive stake in North American Blue Energy Partners (NABEP), the company led by Venezuelan businessman Alejandro Betancourt.

Key terms of the agreement include:

• NABEP will have the opportunity to develop 17 oil fields said to hold 65 billion barrels—approximately one-fifth of Venezuela's total reserves.
• The U.S. government would gain preferential rights to buy 20 percent of NABEP's output at cost.
• The State Department would also have the right of first refusal to purchase the remaining 80 percent, per the White House.
• The Pentagon would ultimately hold those interests, according to the Journal, although a Pentagon spokesman told Reuters that the office structuring the deal lacks authority to take equity.

Background and Context

The arrangement emerged unexpectedly after major American oil companies proved reluctant to invest billions in a country still burdened by political risk, weak institutions, and an uncertain legal order. Trump had predicted otherwise in January, saying American oil companies would spend billions to "fix the badly broken infrastructure" and "start making money for the country."

Regardless, the deal is expected to be a boon for Betancourt, one of the largest beneficiaries of Trump's involvement in Venezuela.

Alejandro Betancourt's Background

Betancourt belongs to the generation Venezuelans have nicknamed the bolichicos: young men from wealthy old Caracas families who became fabulously rich under Hugo Chávez's supposedly anti-oligarchic revolution.

Derwick Associates

When Chávez officially declared an electricity emergency in 2010, the government spent billions of dollars while bypassing ordinary procurement. Betancourt and his cousin, Pedro Trebbau, allegedly decided to cash in on this lapse of oversight. Their new company, Derwick Associates, had no record of building power plants. Within roughly 14 months, however, it won billions of dollars in contracts and relied heavily on a U.S. company for engineering and equipment.

In 2018, Transparencia Venezuela—the national chapter of the watchdog Transparency International—estimated that 11 Derwick projects billed at about $5 billion should have cost $2.1 billion.

Betancourt and Derwick Associates disputed those figures and have denied wrongdoing.

Legal and Financial History

• Betancourt went on to buy a nearly $12 million Fifth Avenue penthouse and later a sprawling estate outside Madrid, where his lavish wedding appeared in ¡Hola! magazine.
• In 2013, former U.S. Ambassador Otto Reich brought racketeering charges against Betancourt and others, alleging corrupt contracting and retaliation. Betancourt denied the allegations, and the federal charges were later dismissed because Reich had not adequately alleged a pattern of racketeering.
• Betancourt moved into oil through a venture connected to the Russian bank Gazprombank and Petrozamora, a producer partnered with Venezuela's state oil company, PDVSA, according to internal records from the Swiss private bank CBH, obtained by the Venezuela Leaks investigative collaboration. Betancourt denied that the companies had formed a joint venture.
• In 2019, while reportedly a target of a federal money-laundering investigation involving PDVSA, Betancourt hired Rudy Giuliani, who was then Trump's personal lawyer. Betancourt was not charged. Giuliani urged Justice Department officials to consider Betancourt's claim that he had secretly supported Juan Guaidó's U.S.-backed opposition—a claim that Reuters could not verify.