The biggest unanswered question in Trump’s Venezuelan oil deal: Where will the $100B in funding come from?
President Trump’s highly touted oil deal in Venezuela will require what all sides agree is about $100 billion in capital investment over the coming years to build the infrastructure needed to get the energy out of the ground.
Yet while many aspects of the deal have been clarified, it’s not clear where all that money will come from to fulfill Trump’s ambitious promises in what he’s calling the biggest oil deal in world history.
The funding issue has emerged as perhaps the central unanswered question about the US government’s plans for this major slice of Venezuela’s oil fields, which geologists estimate holds approximately 65 billion barrels of oil — a massive quantity, but only about one-fifth of Venezuela’s entire reserves, estimated at 303 billion barrels.
The company charged with raising the money and doing the drilling is North American Blue Energy Partners (NABEP), a private Venezuelan entity now partnering with the US.
“Right now our interest is ensuring that the backing of the US allows this company to attract the capital investment necessary to ramp up production rapidly,” a US official told reporters on Tuesday. The official underlined that the United States government is making “zero investment of dollars” in the new venture.
NABEP, led by controversial businessman Alejandro Betancourt, is set to receive leases for the oil fields — which have more proven reserves than in the entire United States — in return for giving the US government a 35% equity stake in the new venture as well as the right to buy 20% of the company’s eventual crude oil output “at production cost.”
The US government also reserves the right to purchase the remaining 80% of the company’s new output at market prices if desired.
Betancourt’s company echoed the $100 billion estimate in a press release this week, saying it “is seeking to rapidly expand its operations in Lake Maracaibo and the Orinoco Belt with the near-term goal of increasing production to more than 1 million barrels of oil per day.”
NABEP has significantly ramped up pumping in recent years, from about 18,000 to 200,000 barrels of daily production, with ambitious plans to deploy more than 50 drilling rigs to scale up further, according to internal company documents obtained by the Wall Street Journal.
A NABEP representative familiar with its plans told Yahoo Finance that the company was confident it could continue ramping up production as the financing is worked out. Yet it was unclear whether the company could keep pace with Trump’s outsized promises.
