The Trump administration is pursuing long term control over some of Venezuela’s most valuable oil fields, with the Pentagon’s investment arm discussed as a possible overseer and Venezuelan businessman Alejandro Betancourt emerging as a key middleman. The plan could reshape U.S. energy security, but it also raises urgent questions about law, sovereignty, corruption risk and whether the Defense Department should be in the oil business at all.
WASHINGTON | Filed at 9:08 p.m. Eastern time
The United States is moving deeper into Venezuela’s oil patch than any recent administration has dared to go.
At the center of the talks is not only Chevron, not only Venezuela’s state oil company, and not only the White House. It is the Pentagon.
The Trump administration is discussing a major oil arrangement that could give Washington long term access to some of Venezuela’s most valuable crude reserves, with the Department of Defense’s Office of Strategic Capital being discussed as a possible overseer for the investment. The talks reportedly involve as many as 17 oil fields across Venezuela’s main petroleum basins and a potential partnership with Alejandro Betancourt, a Venezuelan businessman and energy investor who has become an important intermediary between Washington and Caracas. That makes this much more than a crude supply deal.
It is a test of whether the United States is prepared to treat oil fields abroad as strategic assets managed through national security channels, rather than only as commercial opportunities for private energy companies. It is also a test of whether Venezuela’s new political order can attract investment without repeating the legal confusion, corruption allegations and ownership fights that destroyed confidence in the country’s oil sector for years.
President Donald Trump announced Friday that the United States had secured majority control of more than 65 billion barrels of proven Venezuelan oil reserves through a partnership with private business. He described it as a historic energy achievement and said it would come at no cost to American taxpayers. Secretary of State Marco Rubio presented the deal as a win for both countries, saying it could bring nearly $100 billion in private investment to Venezuela, create jobs and provide the United States with stable, lower cost oil. The scale is breathtaking.
If the arrangement works, it could give U.S. companies and the U.S. government privileged access to one of the world’s largest oil resource bases. It could help U.S. Gulf Coast refineries that are built to process heavier crude. It could reduce China’s role in Venezuelan energy flows. It could give Caracas desperately needed capital after years of collapse, sanctions and mismanagement. It could also allow Trump to tell voters that he is attacking gasoline prices with a Western Hemisphere supply strategy rather than relying on OPEC or the Middle East. But the plan also sits on a legal and political fault line.
Venezuela’s constitution and hydrocarbon laws have long reserved core oil activities to the state. Reuters has reported that experts question whether a U.S. government lease or direct control arrangement would have a clear legal basis under Venezuelan law. The current discussions reportedly include a structure that would lock in a group of oil fields for development by American companies, with resulting crude guaranteed for the United States. A lease model has been discussed, with possible auctions or tenders to allocate individual fields to producers. That structure would be unusual enough if the Energy Department were leading it.
The Pentagon’s possible role makes it far more sensitive. The Office of Strategic Capital was created to help attract and scale private capital for national security priorities. It is designed to use financial tools such as loans and loan guarantees to support technologies, assets and supply chains important to American security. Its original logic was industrial base competition: strengthen critical sectors, pull in private money and reduce dependence on adversaries.
Applying that framework to Venezuelan oil would expand the meaning of national security finance. The argument for doing so is clear. Energy security is national security. The United States remains deeply affected by global oil prices, even as domestic production has grown. The war with Iran, disruption around the Strait of Hormuz and depleted emergency reserves have put new pressure on Washington to secure reliable crude supply. Venezuela’s heavy oil is close to the United States, enormous in volume and strategically attractive if Washington can steer it away from China and toward American refiners.
Yet that same logic also raises the central question: should the Defense Department help oversee a foreign oil stake involving a politically fragile country and a controversial private middleman? That question will define the next stage of scrutiny.
Alejandro Betancourt is not a neutral figure in Venezuelan business history. He made his name through Derwick Associates, a company that won major power plant contracts during Venezuela’s electricity crisis. Reuters reported in 2021 that U.S. and European authorities had investigated transactions related to about $2 billion in state power plant contracts connected to Derwick, while Betancourt’s attorney denied wrongdoing and said any suggestion of corruption was categorically false. Reuters also reported at the time that Betancourt had not been charged in the U.S. cases it described.
More recently, El País reported that Spain’s National Court reopened a case involving allegations of money laundering and tax fraud tied to oil related currency exchange operations. Betancourt’s camp has denied wrongdoing in past matters, and allegations should not be treated as convictions. But his history matters because the United States is now discussing an oil strategy that could rely on him as a bridge between the Pentagon, private investors and Venezuela’s interim government.
In ordinary business, a controversial intermediary is a reputational risk. In a Pentagon linked oil arrangement involving a foreign state’s most important resource, he becomes a governance risk.
That does not mean Betancourt cannot play a lawful role. It means the public needs clarity about what that role is. Is he advising? Investing? Arranging field access? Linking private companies to Venezuelan officials? Helping structure a lease? Providing operating capacity through related companies? Standing between the U.S. government and Venezuelan assets? Each possibility carries different legal, ethical and national security implications. The Trump administration has not yet provided enough detail.
That lack of detail is especially striking because Trump is already describing the arrangement in historic terms. There is a difference between announcing political control over oil reserves and publishing the legal documents that explain how control works. Who owns the fields? Who operates them? Who books reserves? Who receives revenue? Who pays for infrastructure? Who resolves disputes? What happens if Venezuela’s next elected government rejects the deal? What rights do existing operators, former owners or creditors hold? What role does Congress have if the Defense Department backs or oversees the investment? Those are not technical footnotes. They determine whether the agreement is investable.
Venezuela’s oil sector is not short of oil. It is short of trust, power, equipment, skilled labor, legal certainty, export capacity and functioning infrastructure. Reuters has reported that Venezuela produces around 1.25 million barrels per day, far below its potential after years of underinvestment, sanctions and mismanagement. Port bottlenecks, degraded facilities, power failures and tanker constraints have limited recovery. A paper claim to reserves does not automatically become barrels on the water. That is why some oil majors have moved cautiously.
Chevron is already close to restructuring and expanding its Venezuelan joint ventures under the country’s new framework, but ExxonMobil and ConocoPhillips remain wary after past nationalizations and arbitration battles. The biggest companies remember what happened when Venezuela tightened state control, forced foreign firms into state led ventures and later expropriated assets. They also understand that fields in the Orinoco Belt and Lake Maracaibo need capital, equipment and years of work before major gains appear.
Smaller and more politically connected players may move faster. That is where the Pentagon linked talks become so consequential. If the U.S. government uses a national security finance arm to reduce risk, private companies may enter fields they would otherwise avoid. In theory, that could speed production and provide Venezuela with badly needed investment. In practice, it could also shift risk from private investors to the American government, especially if legal challenges, political backlash or field performance problems emerge. The sovereignty question is already exploding.
Venezuelan opposition figures and analysts have criticized reports of U.S. efforts to gain direct control over oil reserves as predatory and unconstitutional. Some warn that the deal resembles old concession models in which foreign powers gained sweeping control over national resources in exchange for promises of development. Those criticisms will resonate deeply in a country where oil is not merely an industry, but the central symbol of sovereignty, national wealth and political identity.
For Washington, that creates a contradiction
The Trump administration says it wants to help rebuild Venezuela after Nicolás Maduro’s removal from power. It says it wants private capital, oil recovery, lower fuel prices and regional stability. But if the first major economic move is seen as Washington taking effective control of huge portions of Venezuelan oil, the deal could undermine the political legitimacy the United States says it is trying to restore.
A reconstruction plan can look like a rescue from Washington. It can also look like a takeover from Caracas. The difference depends on process.
If Venezuela’s people, legislature, courts and future elected government are not meaningfully involved, the deal may face years of legal and political resistance. If existing claims are not resolved transparently, investors will demand higher returns or stay away. If the Pentagon appears to be selecting or backing politically connected intermediaries, Congress will ask why military linked finance is being used in a foreign oil play. If crude flows mostly to U.S. refiners while Venezuelans see little improvement, anger will grow quickly.
The administration appears to be betting that speed matters more than perfect legitimacy. That is a dangerous bet. Venezuela needs revenue now. Its oil fields need investment now. The United States wants supply now. Trump wants a visible energy win before midterm elections. Energy Secretary Chris Wright is expected to travel to Caracas soon. Chevron and other companies are moving toward new arrangements. The momentum is real.
But oil politics punishes rushed structures. A flawed deal can lock in disputes for decades. A legally weak concession can scare away future investors. A corruption taint can poison public support. A Defense Department role can militarize what should be a transparent commercial and diplomatic process. A deal that looks like strategic victory in Washington can become a nationalist grievance in Venezuela. That is the risk of making the Pentagon the face of energy access.
The Defense Department can argue that oil supply, China competition and wartime logistics justify national security involvement. It can argue that OSC is built precisely to crowd in private capital for strategically important assets. It can argue that energy resilience belongs inside the national security framework. But the Pentagon is not an oil ministry. It is not a petroleum regulator. It is not a sovereign wealth fund. Its involvement in foreign oil fields should require extraordinary transparency and congressional oversight. The more strategic the deal, the more public accountability is needed.
Congress should demand briefings. Lawmakers should ask whether OSC has the statutory authority to oversee or finance any part of a Venezuelan oil investment. They should ask whether taxpayer backed loans, guarantees or other instruments are being considered. They should ask what due diligence has been conducted on Betancourt and related entities. They should ask whether anti corruption safeguards, sanctions compliance, beneficial ownership checks and contract transparency will be mandatory. They should ask what happens if a Venezuelan court or future government invalidates the arrangement.
They should also ask why the Pentagon is involved at all. There may be a strong answer. There may not be. The public deserves to know before the United States binds itself to oil fields that could reshape relations with Latin America for a generation.
The economic promise is real enough to explain why the administration is tempted. Venezuela has the world’s largest proven crude reserves. U.S. refiners understand heavy crude. Chinese influence in Venezuelan oil has long worried Washington. A stable Venezuelan supply could help diversify away from more distant and geopolitically fragile sources. In a world of wars, chokepoints and price shocks, nearby crude has obvious appeal. But oil does not become secure simply because the United States declares control over it.
Security comes from enforceable contracts, legitimate institutions, reliable operations, stable politics and public consent. Without those, even the largest reserves can become stranded by lawsuits, sabotage, protests, sanctions fights, infrastructure failures or investor retreat.
That is Venezuela’s lesson. For decades, the country had more oil than almost anyone. It still collapsed. The tragedy was not geology. It was governance.
The Pentagon’s talks with Betancourt now place that lesson directly in front of Washington. The United States can help rebuild Venezuela’s oil sector through transparent investment, fair contracts, clear laws and accountable partnerships. Or it can chase a massive deal through opaque channels, controversial middlemen and hurried political claims of control.
One path builds durable supply. The other builds the next crisis. For now, the administration has given Americans a headline: control over 65 billion barrels. What it has not yet provided is the contract, the oversight plan, the legal foundation or the proof that Venezuelans will benefit from the arrangement as much as U.S. refiners and politically connected investors.
That is the real story behind the massive oil deal. It is not only about barrels. It is about whether the United States is trying to stabilize a neighbor or secure a prize.
Reporting and sourcing transparency note: This article is based on current public reporting from Bloomberg News through Bloomberg Law, Reuters, the Associated Press, The Wall Street Journal, The Guardian, El País, Axios, official Department of Defense materials on the Office of Strategic Capital and prior Reuters investigative reporting on Alejandro Betancourt.
Energy, national security and legal information note: This article is for news and public information only. The reported oil talks remain fluid, and contract terms, legal authority, participating companies, field lists, financing structures and political approvals may change quickly.