Pentagon Is in Talks With Venezuelan Mogul for Massive Oil Deal

(Bloomberg) -- The US government is pursuing a major stake in Venezuelan oil reserves via a potential partnership between the Department of Defense and Alejandro Betancourt, a controversial energy investor who has become a key middleman between the two countries.

The negotiations are focused on as many as 17 oil fields that span Venezuela's main petroleum basins, according to people familiar with the matter.

The Pentagon's Office of Strategic Capital is being discussed as the potential agency to oversee the investment, some of the people also said. The OSC was established by President Joe Biden's administration in 2022 as part of an effort to develop critical technologies with the help of private capital. The Trump administration has tapped the OSC to address supply chain gaps.

The White House and Pentagon declined to immediately comment. A press official for Venezuela's Information Ministry didn't immediately respond to requests for comment. North American Blue Energy Partners, Venezuela's leading independent oil producer which Betancourt controls, didn't immediately respond to a request for comment.

The Pentagon potentially taking direct control of energy reserves in a foreign country is the latest remarkable and unorthodox detail to emerge about US efforts to tighten its grip on Venezuela's oil sector. One possible arrangement under discussion would see the US take a 100-year lease.

Since ex-President Nicolás Maduro's capture in January and his replacement by Delcy Rodríguez, US President Donald Trump has touted rebuilding Venezuela's battered oil industry, which was once the largest in Latin America. Washington now effectively controls Venezuelan oil sales and has eased sanctions to allow US companies to do business in the country.

Still, Venezuela's oil production has only increased marginally this year, and the influx of new investment from foreign investors has been a slow process. In the meantime, the US war with Iran and the disruption to Middle Eastern supplies has pushed up global energy prices, underlining the potential benefits of a speedy revival of Venezuelan output.

While major US oil players ExxonMobil Holdings Corp. and ConocoPhillips have stayed on the sidelines to wait for a more favorable political and investment climate in Venezuela, Betancourt has moved quickly to shore up his oil interests and become a fixer for both the US government and risk-tolerant wildcatters who are hunting for deals.