US Oil Deal with Venezuela Stokes Concerns Among Major Producers

The US government's deal to gain access to Venezuela's oil reserves is causing concerns among some major producers, sources say. The agreement allows North American Blue Energy Partners (NABEP), a private company controlled by Venezuelan businessman Alejandro Betancourt, to receive a 100-year lease for 17 oilfields holding around 65 billion barrels of oil reserves.

The US will take a 35% equity stake in NABEP's corporate parent and receive a guaranteed 20% of the oil production. However, some oil companies are hesitant to invest due to concerns about competing with the US government itself.

A source familiar with the situation stated that 'oil majors and large foreign companies negotiating contract migrations want to make sure they will not be seated at the same table with Betancourt.' The businessman has been under investigation by US and European authorities for past dealings with the Venezuelan government, although he was never charged.

Chevron, which is already operating in Venezuela, is trying to add a new block to its portfolio and negotiate an area that could provide diluents for its extra-heavy oil output. Other companies, such as Shell and BP, have received licenses for major offshore gas projects, but these deals are separate from the US endeavor with NABEP.