U.S.-Backed Oil Deal Replaces Chinese and Russian Operators in Venezuelan Fields
Key Takeaways
- •NABEP will replace Chinese and Russian operators in several Venezuelan oil fields, according to Reuters and unnamed U.S. officials.
- •The Venezuelan government has granted NABEP 14 oil deals.
- •Under the arrangement, the U.S. government will get a 35% stake in NABEP, 20% of production at cost, and first refusal on the remaining output.
- •The White House said NABEP plans to invest up to $100 billion in new oil infrastructure in Venezuela.
- •Officials said the deal could shift oil that was previously sent to China toward the U.S. market.
A U.S. oil company controlled by Venezuelan businessman Alejandro Betancourt will replace Chinese and Russian operators in several Venezuelan oil fields, Reuters reported, citing two unnamed U.S. officials.
North American Blue Energy Partners (NABEP), which is backed by the U.S. government, has been granted 14 oil deals by the Venezuelan government. Under the arrangement, the U.S. government will receive rights to a 35% stake in the company and access to 20% of NABEP’s production at cost. The federal government will also have the right of first refusal to purchase the remaining 80% of NABEP’s production from Venezuelan fields.
“NABEP has developed an ambitious plan to rapidly scale production by investing up to $100 billion in new oil infrastructure in Venezuela, helping to drive economic growth, support thousands of high-paying jobs in Venezuela, and lead to tens of billions in broader economic activity,” the White House said on Monday.
“Venezuela is blessed with an abundance of natural resources, hardworking people and untapped potential,” Alejandro Betancourt, owner of North American Blue Energy Partners, said in a statement cited by Reuters. “This transaction will unleash that potential to the great benefit of both Venezuelans and Americans.”
The fields NABEP will take over were previously operated by several Chinese companies and by Roszarubezhneft, a Russian state-owned entity that managed joint ventures with PDVSA. The Chinese operators included Sinopec, China National Petroleum Corp., and China Concord Resources, which Washington sanctioned in 2019 for dealing in Iranian crude.
“Not only are we opening up new opportunities for the U.S. government to benefit and for U.S. operators to benefit, we are opening up the United States as the market for this oil which was previously being sent to China,” one of the officials told Reuters.
Late last week, President Trump announced what he called an “historic deal” for Venezuelan oil involving 17 fields and a target production level of 1.5 million barrels per day. Over the weekend, reports emerged that North American Blue Energy Partners would operate the fields rather than the U.S. government, clarifying how the arrangement would be implemented.
By Charles Kennedy for Oilprice.com
