The Secret Terms Of Trump's Venezuelan Oil Deal

One reason that the precise terms of the deal have remained hidden until now is that the signed agreement is marked as a“sensitive” government document. That classification is commonly used to shield a variety of federal records from public release, including those containing personnel information, details about ongoing law enforcement operations and matters protected by attorney-client privilege. The document also contains a confidentiality clause barring Betancourt's company from disclosing the“existence and terms” of the US government agreement.

One person familiar with the deliberations said that people close to the Trump administration seemed keen to partner with Betancourt's company because of the privacy and flexibility it offered. That appeared to give NABEP an advantage over publicly traded oil companies, which would be obligated to shareholder reporting requirements.

“For example,” the person said,“Chevron couldn't give 35% of their shares to the Pentagon.”

The oil deal is sensitive partly because of likely resistance in Venezuela, where critics have already described it as a US takeover of the country's precious natural resources.

A ProPublica analysis shows that its terms favor American interests at nearly every turn and try to enshrine the Trump administration's imprint indefinitely.

The document states that a majority of the seven-member board must be US citizens at all times, and the US government can appoint one“non-voting observer” to join the group. Betancourt, who will serve as the chief executive, is the only board member named by the agreement. The initial board will establish the process for choosing new members.

“Throughout the evolution of the deal, it was clear that the governing structure was intended to ensure maximum control by the people making the deal and to insulate them from future administrations seeking to reverse the agreement or call it into question,” a person familiar with the negotiations said.

There is no requirement for any Venezuelan government participation in the board.

The agreement also offers long-lasting protections for Betancourt and unnamed investors. It requires a supermajority vote of five to oust Betancourt as CEO, change the board composition or execute any transactions with a shareholder that isn't the US government, an indirect equity holder, director, affiliate or“immediate family members.”

The board will determine compensation for Betancourt in his role as chief executive, the document says. As structured, the deal does not appear to require any public disclosures about pay or distribution of shares to executives.

The agreement does not say which shareholders, affiliates or family members have been approved to transact with Betancourt's company. Under Barbados corporate law, there is almost nothing that can force those interests to be revealed publicly.

The agreement does, however, require the company to maintain“anti-money laundering controls,” submit to external audits and inspections of its records by the US government, and provide the US government with an annual budget and quarterly unaudited financial statements. It is unclear if these reports will ever be made public.

It could be some time before the company produces enough oil to fulfill a significant share of US demand. Betancourt's company currently produces about 200,000 barrels per day - or about as much over the course of a year as the United States uses in three days.

NABEP aims to increase its production to 500,000 barrels per day by the end of 2028, according to recent reports.

In addition to securing a discount on 20% of NABEP's oil, Washington also has“first priority” to purchase all of the company's remaining oil production for the next 50 years, including an irrevocable right to buy its entire oil supply in the event the US declares a national emergency.

The US also receives a“most favored nation” status that requires Betancourt's firm to disclose any other business agreements it signs, and, if they are favorable, to grant the Washington matching terms.

One person who reviewed parts of the contract was surprised at the tangible benefits for the US compared with the lack of binding commitments to Venezuela:“I gave you 20% of my production at 'cost plus,' fine. I gave you all of my production if there's a national emergency, OK.... So what do I get in exchange?”

A US official said Rodriguez had granted NABEP 100-year oil concessions to operate there, although this figure is not referenced in the accord and appears to contradict Venezuelan law.

In the event of a dispute, Venezuela can't challenge the deal in its own courts. The agreement dictates that any conflict between the company and the United States must be settled under US law, not Venezuela's. The two sides even spelled out that any civil case or arbitration must be argued before the United States District Court for the Northern District of Texas – where Trump's Justice Department has turned, time and again, for favorable rulings.

Where U.S. law does not apply, Texas state law governs, the agreement states.

A Pentagon office has been tasked with someday executing the financial transaction to capitalize on the US government's 35% share in the venture. The document shows that the US will pay nothing up front but plans to acquire its stake in Betancourt's company by paying $0.01 per warrant share. Those terms are set to expire on the 75th anniversary of the closing date.

In a White House statement last month, Trump touted those shares as potentially worth“hundreds of billions,” plus dividends. But Democrats on the Senate Armed Services Committee said they believe the Pentagon office does not have the legal authority to execute an agreement with a foreign entity operating in a country under US sanctions.

Pentagon press secretary Kingsley Wilson said that the Defense Department conducts“extensive due diligence” before extending capital assistance. Wilson declined to comment on any of the legal considerations or further technical aspects of the deal“to protect the integrity of the process.”

Several other detailed aspects of how the company will operate are currently under negotiation among the Trump administration, Betancourt and the parent company, the partnership documents show. The agreement repeatedly cites a set of“Implementation Documents” that will finalize the US ownership stake and the rights of unnamed investors.

The full force of the deal will not take effect until both parties have complied with its closing conditions, which the agreement indicates could happen within months.

Last month, Senate Democrats blasted what was known of the oil accord and demanded details in a letter to Rubio, Hegseth and Secretary of Energy Chris Wright.

“It is unclear why the American public should support this attempt to entangle the United States with a relatively unknown foreign oil company that lacks the capacity or credibility to develop oil fields of the magnitude described and whose leadership has faced international criminal investigations,” four ranking senators said in the letter.

They asserted that most of the“oil fields are nowhere near ready for production” and that it could“take up to a decade before global oil markets are meaningfully impacted and the American people see any tangible benefit.”

Almost immediately after U.S. special operations forces seized President Nicolás Maduro in January and airlifted him out of Venezuela, Trump left little doubt that his larger goal was to restore American access to Venezuela's oil reserves two decades after most US firms had been ejected from the country.

By early spring, an obscure cast of energy officials, lawyers and lobbyists had started to craft plans to deliver on Trump's America First energy agenda. One person familiar with the deliberations said that US officials had considered backing an idea for publicly held American oil companies such as Chevron, Exxon and Conoco to carve up and rehabilitate Venezuela's aging oil sector. Another potential route went through Betancourt's company, which is the second largest private oil firm operating in Venezuela. Working with the Venezuelan state company, Petróleos de Venezuela, SA, was never really an option due to its underlying debt and history of corruption, the person said.

The option of turning to large multinational oil companies quickly stalled. In some cases, oil executives balked at jumping back into the complexity of the Venezuelan market; in others, firms struggled to get more than“lip service” meetings in Washington and Caracas, according to media reports and people familiar with the deal.

“NABEP was given priority,” one person said.“Exxon, Conoco and the others were treated as second class.”

Betancourt's star was rising in the Trump administration. He had served as an interlocutor for Washington with the Maduro government and had ties to some leaders of the Venezuelan opposition, according to current and former US officials. He had also provided information that helped the US forces seize Venezuelan oil tankers and that aided strategy and planning before the capture of Maduro, Reuters reported.

In addition, Betancourt had developed a good relationship with Rodríguez, whom Trump had backed as the country's interim president. And Betancourt had done so despite the fact that her influential brother, National Assembly President Jorge Rodríguez, had accused him of corruption in a televised speech in 2020, according to former US officials and press reports.

US officials also saw practical reasons to partner with Betancourt, several people said. He and his then-business partner in the US, Harry Sargeant, a Trump supporter, appeared to be a rare success story in a battered industry, operating some of the only active oil fields in the country.

“The main thing I found promising is that the fields are producing in Venezuela,” said a former State Department official who analyzed the company's activities.“I think it's particularly important that you buy into fields that are producing.... If your policy goal is to raise production quickly, this makes sense.”

But partnering with Betancourt posed major challenges.

For starters, the 46-year-old billionaire was confined to house arrest on his 300-acre Oxfordshire estate in England, fighting off a Swiss extradition request tied to an international money-laundering probe. Betancourt could fly to his $46 million London residence by private helicopter - but his Venezuelan and Italian passports were locked down, and British authorities had barred him from driving on public roads, according to media reports about the special bail arrangement.

Betancourt's legal problems stemmed from his role in troubled Venezuelan energy projects during the corrupt rule of former President Hugo Chávez. Several of Betancourt's known or alleged associates were charged or convicted in a major US money-laundering investigation known as Operation Money Flight. Betancourt surfaced as a suspect in the US case and is still under investigation for suspected money laundering by authorities in Spain, according to former US and European officials and press reports.

The most popular leader of the Venezuelan opposition in exile, María Corina Machado, recently described Betancourt as having been involved in“obscene corruption” that caused great suffering for the Venezuelan people, according to a recent New York Times interview.