U.S. President Donald Trump said Monday that ExxonMobil, the largest U.S. oil major, was among a group of companies planning to do business in Venezuela.
Exxon declined to comment. Any entrance into the South American country would mark a stunning reversal nearly two decades after the company exited following the nationalization of its assets. The oil producer operates the prolific Stabroek Block in next-door Guyana, which currently produces more than 900,000 barrels of oil a day.
"We have Exxon going in, we have Chevron going in, we have our big oil companies going in, and everybody's bidding," Trump said at a press event in the Oval Office, adding that the U.S. was taking out "millions and millions of barrels of oil" that is currently being shipped to refineries in Texas and Louisiana, among other locations.
"We're making a fortune, and they're making a fortune. They're starting to make real money," Trump continued, referring to American efforts to kick-start oil production in the country after U.S. forces captured and removed former President Nicolas Maduro from power in January.
Exxon CEO Darren Woods drew Trump's ire after he called Venezuela "uninvestable" during a White House meeting in January, saying that more durable investment protections were needed. The company in March said it would be sending a technical team to study opportunities in the country, although it has been tight-lipped about any plans since.
Venezuelan and American officials are expected to sign a deal that would grant the U.S. access to a fifth of Venezuela's crude reserves later this week in Caracas. Separately, firms including Chevron, GE Vernova, India's ONGC, Italy's Eni and Colombia's GeoPark are also on track to announce agreements for new or expanded projects in the country.
U.S. oil company North American Blue Energy Partners (NABEP) will take over some oilfields previously controlled by several Chinese companies and a Russian firm, two U.S. officials told Reuters on Monday.
The takeover will be part of a sweeping oil production agreement that President Donald Trump announced with Venezuela, they said.
The projects were among 14 contracts newly granted to U.S.-backed North American Blue Energy Partners, according to the officials. NABEP was previously owned by U.S. oil tycoon Harry Sargeant and is now controlled by Venezuelan businessman Alejandro Betancourt.
How are Caracas and Washington structuring a massive oil output deal?
The large-scale oil production agreement that Venezuela and the U.S. disclosed last week requires a complicated three-layer structure to develop at least a portion of the 64 billion barrels of proved reserves contained in the 17 oilfields included in the deal.
If completed as it is being negotiated so far, the pact will immediately provide the U.S. with a base volume of exportable Venezuelan crude from mature fields already in operation, with total production set to grow to up to 1.5 million barrels per day (bpd), authorities have said.
But many doubts over the unprecedented deal's legality and operational feasibility remain unaddressed.
The first layer is the government-to-government pact announced on Friday, whose terms Caracas and Washington negotiated for months to reach several goals:
1. Secure U.S. access to the oilfields "through a partnership with private business," according to U.S. President Donald Trump.
2. Grant that most production will be shipped to the U.S. due to energy security.
3. Build a long-term relationship with the fields' operator.
Full contents of the agreement have not been released and might not be in the short term, since a recent reform of Venezuela's main oil law removed the National Assembly's mandatory oversight over energy contracts marked as in the national interest.
Lawyers and experts have warned that the pact might eventually end up in court, citing its long duration, its lack of approval by other institutions in Venezuela and the U.S. and the absence of a competitive process to choose partners.
Venezuela's hydrocarbons law only authorizes two models to produce oil in the OPEC country: joint ventures and production-sharing contracts. Joint venture partners can secure equity in the producing company and book the reserves for 25 years plus a 15-year extension. Production-sharing deals authorize output for undetermined duration, without equity rights.
It is not clear yet which model NABEP - the U.S. company Washington has chosen to partner for the deal, according to sources - will opt for. Any structure needs a partnership with Venezuela's state-run oil company PDVSA, analysts said.
PDVSA and NABEP, previously owned by U.S. oil tycoon Harry Sargeant and now controlled by Venezuelan businessman Alejandro Betancourt, have been partners for years. A new joint venture could absorb and expand NABEP's existing projects, providing a base of exportable oil output, the sources said.
Maybe the most complicated part of the deal is a transaction for the U.S. to secure participation in NABEP's operations in Venezuela.
According to Trump, the umbrella deal was negotiated by Venezuela's interim President Delcy Rodriguez, U.S. Secretary of State Marco Rubio and U.S. Secretary of Defense Pete Hegseth, with the U.S. Department of Energy excluded from that phase.
Last week, the Wall Street Journal reported that the Pentagon plans to take a 35% passive stake in the private company that will hold the rights in Venezuela, with the Defense Department's Office of Strategic Capital structuring the investment in NABEP through "penny warrants" that would give the U.S. equity ownership without requiring significant upfront capital.
The U.S. also has negotiated rights to secure an additional 20% from the fields' total oil output, which could help replenish the U.S. Strategic Petroleum Reserve, sources said.
(Reuters)