A Guardian investigation finds the Venezuela oil deal Donald Trump has called the biggest in world history is likely to collapse, citing legal limits on deal length and doubts over the Pentagon's authority to hold equity. Venezuela's interim president Delcy Rodriguez, meanwhile, left this week's UN General Assembly with photos alongside Trump but no signed agreements on debt, energy or mining.
The deal Trump struck after US forces seized former President Nicolás Maduro in a January raid is almost certainly doomed to collapse amid a wide array of legal and logistical issues, a Guardian investigation found. Venezuelan law does not allow oil concessions beyond 25 years, yet the administration has described the arrangement as a 100-year deal.
Pentagon's role in dispute
In August, Trump announced that the Pentagon's office of strategic capital would own a third of North American Blue Energy Partners (Nabep), Venezuela's second-biggest private oil firm. But the Pentagon told lawmakers in a written briefing that it holds only warrants — rights to purchase shares, not the shares themselves — rather than the 35% stake the administration has publicly claimed. The administration also says the state department will have the right to buy 20% of the oil Nabep pumps, at cost.
Legal experts say the office of strategic capital is not authorized under US law to make equity investments, and the Pentagon itself told Reuters in August that the office does not take equity stakes in private companies. Nabep, incorporated in Barbados, produced just 23,000 barrels per day according to Venezuela's interim president.
Trump has said the deal will help refill the US Strategic Petroleum Reserve, which fell to a longtime low after the US invaded Iran. But the Guardian's sources say Venezuelan oil will not help replenish the reserve any time in the near future. According to former US diplomat John Feeley: "The deal is like the big beautiful wall that Mexico will pay for."
No deals at the UN
Rodriguez traveled to New York this week seeking agreements on debt, energy and mining, pledging in a UN speech that Venezuela would transition to full democracy through elections. She returned with photographs alongside Trump but no signed agreements. The Inter-American Development Bank is separately working toward a $2.5 billion bridge loan for Venezuela, though some board members oppose it.
Following Rodriguez's meeting with Trump, Rubio said the project's success depends on a free and fair election, while analysts estimate organizing a vote will take at least 12 months.
Sources: The Guardian, Reuters via Investing.com
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