The Pentagon Now Owns Venezuela Oil — And That Changes Everything

A Pentagon Stake in Private Oil — No Precedent

The U.S. government now owns a direct equity stake in a private oil company operating in a foreign country. Not a loan. Not a guarantee. Thirty-five percent ownership, given at no cost to taxpayers, in a company called North American Blue Energy Partners — a Barbados-headquartered firm that controls 65 billion barrels of proven Venezuelan crude reserves.

If the White House figures hold, that makes NABEP the second-largest oil company on Earth by proved reserves, trailing only Saudi Aramco. It holds roughly four times the reserves ExxonMobil controls globally.

Tyler Priest, a historian of the oil industry at the University of Iowa, could not find a parallel. During World War II, Washington considered taking direct control of an oil concession in Saudi Arabia and backed down after industry pushback. In 1976, Congress nearly created a federal oil company — the vote narrowly failed.

Now the Pentagon is not just buying oil from Venezuela. It owns a slice of the company that produces it.

How the Deal Is Structured

The arrangement was struck eight months after Washington ousted Nicolás Maduro in a military raid and installed an interim government led by Delcy Rodríguez. That government granted NABEP concessions to 17 oilfields for a century.

In return, the Pentagon’s Office of Strategic Capital received 35% of NABEP at zero cost. The State Department can buy 20% of output at the cost of production — below market price — with first refusal on the remaining 80%. The Pentagon can veto board appointments. A majority of directors must be U.S. citizens. The entire deal is governed by U.S. law.

Scott Lincicome, an international trade law expert at the Cato Institute, was blunt: “This is straight up a state-owned enterprise. De facto control of 100% of output at cost — that’s ownership.”

The strategic logic is clear. The oil flows into the Strategic Petroleum Reserve and provides supply for military and sensitive uses. A U.S. official described it as “first and foremost about geopolitics” — an opportunity to secure fields previously under Chinese and Russian influence.

But the legal architecture is not.

The Betancourt Problem

NABEP’s CEO is Alejandro Betancourt, a figure whose record is far from clean. He has faced investigations into money laundering and corruption in past ventures. He has not been charged with any crime and denies wrongdoing.

The Pentagon initially stated that the Office of Strategic Capital does not take equity stakes in private companies, limiting its role to loans, guarantees, and technical assistance. Within days, the White House confirmed the 35% stake. A Pentagon spokesperson then said the equity position was “structured consistent with the statutory authority granted to the Office of Strategic Capital” — a sentence that offers more reassurance than explanation.

A U.S. official told reporters: “I’m not nominating anyone for sainthood here.” The official added that Betancourt is a “proven oil operator” who has “been helpful to the United States government” in the past and can bring fields into productive capacity.

NABEP claims it has scaled Venezuelan production from 18,000 barrels per day to more than 200,000 bpd, making it the country’s second-largest private producer. It projects nearly $100 billion in investment and a near-term target of over 1 million bpd.

The credibility of those projections depends entirely on whether the deal survives scrutiny.

Big Oil Is Not Coming

The Trump administration insists the deal is meant to catalyze private investment, not replace it. Energy Secretary Chris Wright told CNBC the government will “not be the operator or producer” and that the arrangement is designed to strengthen investor confidence.

The evidence suggests otherwise.

ExxonMobil’s CEO Darren Woods told Trump directly that Venezuela is “uninvestable.” ConocoPhillips says it will not return until it recovers debts owed by Caracas. Chevron, the only major active in Venezuela, announced a separate $7 billion investment this week — but that deal predates the NABEP arrangement and operates on its own terms.

“This entity came about due to a lack of private investment interest in Venezuela,” Lincicome said. “It’s hard for me to see where private capital now floods in.”

The contradiction is structural. A government that can veto board appointments and buy oil below cost is not a confidence-building measure. It is a signal that the state, not the market, sets the rules.

Who Wins, Who Loses

Washington wins strategic depth. The Pentagon gains a direct conduit to one of the world’s largest untapped reserve bases, insulated from market volatility and accessible for national security uses. China and Russia lose ground in a basin they have been cultivating for years.

Venezuela wins if the deal delivers on its investment promises — revenue that could pull the country out of two decades of economic collapse. But the Rodríguez government is leasing resources to a foreign-backed entity with a century-long concession. That is sovereignty in name only.

U.S. taxpayers win if the equity appreciates. They lose if the arrangement is challenged and the government’s legal footing is found wanting. Peter Harrell, who served as an international economics advisor on the National Security Council under Biden, noted that the administration has not laid out a legal rationale for how the Pentagon can acquire and hold equity in a private foreign-operating company. “The Trump administration does not appear to have laid out any legal rationale or justification for how they think they can do this.”

The Long Game

The deal faces political risk on both sides of the border.

Bob McNally of Rapidan Energy pointed out that a Democratic victory in 2028 would almost certainly trigger a reconsideration — and likely termination — of the arrangement. A Republican victory brings its own risk: a future Venezuelan government could repudiate the concessions entirely, regardless of who sits in the White House.

“Significant political risks in both Washington and Caracas will limit the plan’s impacts,” McNally said.

That is the fundamental tension of Trump’s state capitalism in energy. The deals are designed to be fast, decisive, and insulated from market discipline. But they are also vulnerable to political reversal — in Washington, in Caracas, and in the courts.

The Pentagon now owns a slice of Venezuelan oil. That has never happened before. The question is whether the structure can survive the politics.