Key facts
- The U.S. has structured its 35% stake in a Venezuelan oil venture as warrants to prevent dilution.
- Billionaire Alejandro Betancourt, previously investigated for money laundering, is a key partner in the U.S. oil agreement with Venezuela.
- The Pentagon's Office of Strategic Capital holds a 35% stake in Betancourt's company, North American Blue Energy Partners (NABEP).
- The State Department has the right to buy 20% of NABEP's oil at cost and preferential access to the remaining 80%.
- Betancourt previously provided information that aided a U.S. naval blockade against sanctioned oil tankers in Venezuela.
- U.S. federal prosecutors paused an investigation into Betancourt concerning alleged embezzlement from Venezuela's state-owned oil company.
The United States has structured its 35% stake in a Venezuelan oil venture as warrants to prevent dilution from future capital raises, according to a Reuters report. This arrangement involves Alejandro Betancourt, a billionaire who was previously a target of U.S. money-laundering investigations related to funds embezzled from the state-owned oil company PDVSA.
Under the agreement, the Pentagon's Office of Strategic Capital takes a 35% stake in Betancourt's company, North American Blue Energy Partners (NABEP), a known crude producer in Venezuela. The State Department will have the right to buy 20% of NABEP's oil at cost, with preferential access to the remaining 80% of output. This deal grants the U.S. access to approximately one-fifth of Venezuela's crude reserves for decades.
Betancourt's role in brokering the deal marks a significant shift in his standing with U.S. authorities. He reportedly provided information that aided a U.S. naval blockade targeting sanctioned oil tankers operating in Venezuela prior to the capture of Nicolas Maduro. He also facilitated negotiations with Venezuelan officials.
While U.S. federal prosecutors in Florida had previously paused an investigation into Betancourt concerning alleged embezzlement of over $1 billion from PDVSA, a U.S. official stated that most legal challenges against him are nearly a decade old and he currently has no legal problems in the United States. NABEP's lawyer confirmed that allegations have been examined extensively by authorities in multiple jurisdictions without charges being brought. Swiss authorities also withdrew their request to extradite Betancourt from the United Kingdom, though their criminal proceedings against him are ongoing.
Betancourt, a prominent figure among a generation of Venezuelan business people who amassed fortunes during the Hugo Chavez administration, previously won government contracts for power plant construction. His company, Derwick Associates, was awarded approximately $2 billion in contracts during the country's electricity crisis in the 2010s. Betancourt and Derwick have denied wrongdoing, stating that facilities were completed and subsequent failures were due to mismanagement by state authorities.