Pentagon Holds Equity in Venezuelan Oil Fields While Legal Authority Remains Undisclosed
The Defense Department's Office of Strategic Capital quietly acquired penny warrants worth up to 35% of a private Venezuelan oil company — with no public warrant agreement, no disclosed OFAC...
Three days before the White House confirmed the arrangement, Pentagon Chief Spokesperson Sean Parnell stated on the record that the Office of Strategic Capital 'does not take equity stakes in private companies.' The White House's subsequent Monday announcement directly contradicted him, confirming that the OSC had structured penny warrants granting the U.S. government up to a 35% stake in the corporate parent of North American Blue Energy Partners, or NABEP — a private firm holding 100-year concession rights to 17 Venezuelan oil fields estimated at 65 billion barrels of proven reserves. No retraction, correction, or explanation of the contradiction has been issued by either the Pentagon or Parnell, according to available public records.
The deal was negotiated by Secretary of Defense Pete Hegseth and Secretary of State and National Security Adviser Marco Rubio, a dual-role concentration of foreign policy authority, and signed on the Venezuelan side by Vice President Delcy Rodríguez, who serves as Nicolás Maduro's deputy and was not elected to any executive authority over national resource concessions. The White House confirmed both cabinet officers' roles in a public statement cited by The New York Times and i24NEWS. Rodríguez appears on the Treasury Department's Office of Foreign Assets Control Specially Designated Nationals list under Executive Order 13850, which targets Venezuela's oil sector. No public OFAC General License or Specific License authorizing U.S. government entities to transact with a designated Venezuelan official has been identified in available records. The U.S. sanctions regulations governing Venezuela, codified at 31 C.F.R. Part 591, prohibit such transactions absent a license.
The central private-sector beneficiary of the arrangement is Alejandro Betancourt López, identified in White House statements and reporting by The New York Times and Wall Street Journal as the majority owner of NABEP. Betancourt has faced money-laundering investigations in Spain and Switzerland, as reported by the Wall Street Journal in coverage cited by journalist Mariana Atencio. No formal charges have emerged from either jurisdiction as of this report. Betancourt's personal relationship with Delcy Rodríguez, the Venezuelan official who signed the concession agreement on behalf of the Maduro government, has been reported publicly but no documentation of competitive bidding for the 100-year concession has been disclosed. The concession grants NABEP operating rights to oil fields containing roughly one-fifth of Venezuela's total proven reserves.
The corporate architecture magnifies the disclosure gap. The Pentagon's penny warrant attaches not to NABEP itself but to NABEP's corporate parent, an entity whose name, jurisdiction of incorporation, full ownership structure, and capitalization have not been made public in any filing or government statement reviewed for this report. A penny warrant, by design, requires near-zero upfront payment — avoiding the congressional appropriation process that a direct cash investment would trigger — while conveying the right to purchase equity at a nominal strike price, typically one cent per share. Because no term sheet, warrant agreement, or deal document has been released, the strike price, vesting schedule, voting rights, anti-dilution provisions, and exit conditions governing the U.S. government's equity position are entirely unknown to the public and, based on available records, to Congress.
The State Department separately negotiated the right to purchase 20% of NABEP's oil output at production cost, ostensibly to refill the Strategic Petroleum Reserve, per the White House statement cited by i24NEWS. No public record identifies which U.S. government appropriations account would fund those purchases, who would conduct independent audits of NABEP's cost accounting, or which congressional committees were notified. Because NABEP would control its own production cost declarations, the effective price paid by the U.S. government for that oil is determined by the same private company receiving the government's equity backing — a structural conflict with no disclosed remedy.
The OSC's parallel activity compounds the conflict-of-interest record. ProPublica, cited by the Philadelphia Inquirer and GVWire, reported that White House aide Peter Navarro — described in those reports as a friend of Donald Trump Jr. — requested OSC financing for Vulcan Elements, a company with financial ties to the president's son. The exact nature of Trump Jr.'s relationship with Vulcan Elements, whether equity, advisory, or contractual, has not been fully disclosed in available public records, nor has the dollar amount of OSC financing sought or approved. Separately, rare earths firm ReElement Technologies withdrew from the OSC financing process in July 2026 because it was 'struggling to meet federal due diligence standards,' according to Reuters as cited in those same outlets. The contrast between a company rejected on due diligence grounds and a company advanced through a White House aide's personal request is documented in the public record; any internal OSC evaluation comparing the two processes has not been released.
The Venezuelan legal dimension adds a further layer of unresolved questions. Article 12 of Venezuela's Bolivarian Constitution of 1999 declares that subsoil petroleum resources are inalienable property of the Republic. Mariana Atencio and legal analysts cited in public reporting have argued that a 100-year concession to a privately controlled, U.S.-government-backed foreign entity constitutes precisely the alienation the constitution prohibits. The U.S. government has not publicly stated which Venezuelan governmental authority it considers legally empowered to grant these concessions — the Maduro government, which the U.S. has declined to formally recognize, or an opposition structure that does not physically control the fields. No National Security Decision Memorandum, Presidential Directive, or Executive Order authorizing the transaction has been released, nor has any legal opinion from the Defense Department's Office of General Counsel or the Justice Department's Office of Legal Counsel been made public confirming that OSC's statutory authority under Section 1001 of the FY2023 National Defense Authorization Act extends to direct equity warrant positions rather than the credit facilities the statute was written to enable.
What remains hidden is substantial and consequential. The full warrant agreement between OSC and NABEP's parent — including every financial term — has not been released. The identity and ownership of NABEP's parent company is undisclosed. The OFAC licensing authority permitting a U.S. government entity to transact with a sanctioned Venezuelan official has not been published. The legal opinion authorizing OSC equity participation has not been made public. The appropriations source for the State Department's oil purchase rights is unidentified. The status of any U.S. federal investigation touching Betancourt has not been confirmed. A formal request under the Freedom of Information Act to the OSC, the OLC, and OFAC for the warrant agreement, the applicable legal opinions, and any General License or SDN delisting action related to Delcy Rodríguez would, if answered, resolve the central factual questions this arrangement currently leaves open. Congress's authority to compel production of these documents through the House and Senate Armed Services, Foreign Relations, and Appropriations Committees provides a parallel disclosure path that, as of this writing, has not produced public results.