US gets board veto, right of first refusal in Venezuela oil deal

The US detailed plans to exercise greater control over a private operator under a historic deal to seize Venezuela’s oil reserves, including the first option to buy a significant share of its crude production and veto power over board appointments.

A fact sheet released by the White House on Monday offers the first public accounting of the deal first announced by President Donald Trump last week, seven months after the capture of longtime Venezuelan leader Nicolás Maduro in a stealth military operation.

According to the document, the US will have the first opportunity to buy some 80% of oil production by North American Blue Energy Partners, a privately held company granted 100-year concessions on 17 oil fields in Venezuela. The White House said that crude would be supplied at the cost of production. NABEP is also granting the US State Department the right to purchase a guaranteed 20% of its offtake from current and future fields, ensuring stable supplies of cheap oil, the fact sheet said.

The US will have veto power over the appointment of any member of NABEP’s board of directors and a majority of the board must be US citizens, according to the fact sheet.

Trump boasted of the arrangement — calling it “maybe the greatest deal ever made” — on Monday, and said he intends to use the oil to help restore the emergency US stockpile.

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“One of the things I want to do with all of that oil that we now have, I want to fill up these strategic reserves, and we’ll get that done fairly quickly,” Trump said in an Oval Office event.

“We’re going to be taking that oil out. It’s all coming to the US for refineries,” he added.

NABEP said it plans to boost production from its operations in Venezuela’s Lake Maracaibo and Orinoco Belt to more than 1 million barrels of oil per day — an ambitious target in a country where current daily output is about 1.1 million barrels.

The US-Venezuela oil deal represents the outgrowth of a Trump policy of expanding influence in the Western Hemisphere, dubbed the “Donroe Doctrine.” By starting a new venture directly controlled by the US, the administration is seeking to give producers more confidence to commit to developing the 17 oil fields involved in the deal.

US officials have explicitly said taxpayers won’t be on the hook to support the venture. Instead, the US focus of the deal is the Pentagon’s Office of Strategic Capital, which will hold a 35% equity stake in NABEP’s corporate parent, according to the fact sheet. The White House said that represents up to hundreds of billions in value and dividends for the US.

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It’s unclear whether any oil company could rapidly boost Venezuela’s crude output, especially on the scale US officials and NABEP are describing. Despite the nation’s oil wealth — some of the world’s largest proven reserves — decades of corruption and underinvestment have left a network of rusty pipelines, oil spills and damaged equipment.

Trump’s deal is also up against political challenges. Questions remain about whether the arrangement would be fully embraced by a future American president, or how it might endure any political upheaval in Venezuela.

Some members of Venezuela’s opposition had also fretted that a deal between the US and interim President Delcy Rodríguez could reduce the odds of a political transition by solidifying her hold on power and diminishing the Trump administration’s incentive to push for change.

The White House reaffirmed Monday that it’s supporting political reforms through talks between the current government, which it called the “interim authorities,” and a sector of the opposition. A second round of negotiations is set to begin in September.

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