Trump's oil deal with Venezuela raises red flags for some major producers, sources say

• NABEP will receive a 100-year lease for 17 Venezuelan oilfields; the U.S. gets 35% equity, guaranteed 20% of production, and first-refusal rights on remaining output
• ExxonMobil and ConocoPhillips, which left Venezuela in 2007 after nationalization, have not committed to returning despite Trump's claims, citing concerns about legal certainty and contract sanctity
• The deal structure creates potential competition between U.S. oil majors and their own government, complicating efforts to attract the 'sizable investment and know-how' needed to boost Venezuela's oil output

Summary:

President Trump's oil agreement with Venezuela is generating concerns among major oil producers considering investments in the country. The deal grants private firm North American Blue Energy Partners (NABEP) a 100-year lease for 17 oilfields containing approximately 65 billion barrels of reserves. The U.S. will hold a 35% equity stake in NABEP's parent company, receive a guaranteed 20% of oil production, and maintain first-refusal rights on remaining output.

Key Concerns:

The involvement of Venezuelan businessman controlling NABEP—previously investigated (though never charged) by U.S. and European authorities—is causing hesitation among oil majors. Sources indicate companies are wary of competing directly with the U.S. government and want to avoid association with the businessman. NABEP currently produces 170,000 barrels daily with goals exceeding 1 million barrels per day.

Major Players:

ExxonMobil and ConocoPhillips, whose assets were nationalized in 2007 under Hugo Chavez, remain cautious despite Trump's claims of Exxon's involvement. Both companies cite concerns about legal certainty and contract sanctity. ExxonMobil declined to comment; ConocoPhillips referenced policy stability requirements.

UBS's Chief Investment Officer notes that achieving production goals requires "sizable investment and know-how" from major producers like Exxon and ConocoPhillips, questioning how to attract them given the complex structure.

Active Participants:

Chevron (Venezuela's largest U.S. producer), Italy's Eni, India's ONGC, Colombia's GeoPark, and GE Vernova are expected to sign separate energy project agreements this week. Shell and BP recently received licenses for offshore gas projects. These deals are independent of the U.S.-NABEP arrangement and involve contract migrations under Venezuela's new energy reform framework.