Trump's Venezuela Oil Deal Raises Red Flags Among Major Producers

U.S. President Donald Trump's deal to access a fifth of Venezuela's oil reserves has raised red flags among some major producers, sources say.

The agreement, outlined in a White House fact sheet, would give private firm North American Blue Energy Partners (NABEP) a 100-year lease for 17 oilfields holding 65 billion barrels of oil reserves. The U.S. would take a 35% equity stake in the corporate parent company and receive a guaranteed 20% of the oil production.

NABEP is controlled by Venezuelan businessman Alejandro Betancourt, who has been investigated by U.S. and European authorities over past dealings with the Venezuelan government. Betancourt has denied allegations against him.

Some oil majors are hesitant to invest in Venezuela due to concerns about being seated at the same table as Betancourt. Chevron, on the other hand, is trying to add new blocks to its portfolio and aims to negotiate an area in Monagas North for diluents for its extra-heavy oil output.

The planned structure of the deal has raised concerns that American oil companies could face competition from the U.S. government itself in Venezuela. This could add obstacles to Trump's goal of increasing Venezuela's oil output and exports to boost U.S. reserves.