The Venezuela oil deal championed by Trump carries a well-recognized price tag of around $100 billion in capital investment over the coming years, needed to build the supporting infrastructure for crude extraction. While many of the agreement’s specifics have been clarified, the exact source for this enormous sum of money remains unclear, leaving a critical gap in fulfilling this ambitious pledge.
The funding question now stands as the central unsolved problem in the U.S. government’s plans for Venezuela’s vast oil fields. Geologists estimate these fields hold roughly 65 billion barrels of crude, a substantial amount, yet this represents only about one-fifth of Venezuela’s total石油 reserves, according to data from the U.S. Energy Information Administration (EIA).
The company tasked with raising capital and conducting drilling operations is North American Blue Energy Partners (NABEP), a Venezuelan private firm that has become the U.S. partner in this venture. A U.S. official told reporters on Tuesday: “Our current focus is to use the U.S. endorsement to enable this company to attract the necessary capital, thereby rapidly increasing crude output.” The official stressed that the U.S. government will not contribute a single dollar of fiscal funding to this new cooperative project.
NABEP, led by the controversial businessman Alejandro Betancourt, will receive extraction leases for the relevant oil fields. In exchange, the U.S. government will obtain a 35% equity stake in the joint venture and hold the right to purchase 20% of the company’s future crude production at production cost. The U.S. government also retains the option to buy the remaining 80% of the company’s new crude output at market prices.
Betancourt’s company stated this week: “We plan to rapidly expand operations in Lake Maracaibo and the Orinoco heavy oil belt, with a short-term goal of raising daily crude output to over one million barrels.” NABEP has already significantly scaled up its extraction levels in recent years, increasing daily production from about 18,000 barrels to 200,000 barrels, and the company plans to deploy more than 50 drilling rigs to further boost capacity.
A company representative familiar with NABEP’s plans told Yahoo Finance that, provided financing comes through, the company is confident it can continue to grow output. However, whether the company can deliver on Trump’s grand targets remains uncertain. When Trump announced the deal last Friday, he said it would “significantly lower gasoline prices for all Americans,” adding on Monday that the increase in crude production would outpace expert expectations. Trump said: “The pace will be very fast, and I expect people will feel the change within two years.”
Seeking “a stable supply of low-cost crude” for the U.S., a White House fact sheet shows the overall goal is to secure “a stable supply of low-cost crude to help replenish the Strategic Petroleum Reserve without costing American taxpayers a cent.” While replenishing U.S. energy reserves is no simple task, the Trump administration has expressed confidence in Betancourt’s execution ability, calling him an “experienced operator.”
NABEP is currently Venezuela’s second-largest private oil producer and aims to surpass industry leader Chevron. Despite the many controversies surrounding Betancourt’s personal history, the deal has advanced swiftly. Betancourt first rose to prominence in Venezuela as an ally of Hugo Chavez, later falling out with the regime. More recently, he has faced criminal investigations related to money laundering in Spain and Switzerland.
The White House also views this agreement as a national security victory, as some of the oil fields in the area were previously leased to Russian and Chinese energy companies. Meanwhile, Chevron is also pursuing independent plans to develop other blocks in Venezuela. The Houston-based company, which currently produces about 300,000 barrels of crude per day in Venezuela, is expected to announce new investment plans later this week to further expand its local operations.