Trump Needs a Win. Enter His Venezuela Oil Deal

0:0017 courts, hundreds of matches, thousands of points, all happening simultaneously during the US Open, and you can't possibly be there for everything. That's why IBM helps bring together billions of data points with more than 20 years of player history, with scores, stats, insights, and highlights behind every moment so nothing gets missed. IBM, let's create smarter business. Never bet against American grit or American energy. Through innovation, venture global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's venture global. That's unstoppable energy. If you listen to financial news, you know a lot of time to spend thinking about what's next.

1:00The next opportunity, the next investment, the next move. But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. But Cincinnati Insurance make your bad day better. Find an independent agent at cianfian.com. Bloomberg Audio Studios, podcasts, radio, news. Liam, you'll excuse the cynicism here. But do you see this as a bet on the next hundred years, or is this more a bet on something tangible happening here the next eight weeks leading up to the midterm elections here in the US? The next hundred hours? In terms of what the US wants here or what Trump wants, I think you can answer that on two levels. So there is the kind of grand strategy long term answer, which is that the US can somehow

2:05fashion some kind of Western hemisphere like oil fortress and Venezuela will be very much a part of that. The other answer to that question is that Trump needs a win on what he did in Venezuela. He badly needs to signal that he's noticing people's unease about fuel prices, which are diesels at a record. Gasoline is a close to a record. It's very possible that we may enter the midterms with gasoline above $4 a gallon on average for the very first time. It's clear that this is really weighing on the administration. And that's why I feel like the holes and the contradictions in this deal to me speak to the need to send a signal and worry about the execution later. I'm David Grera and this is The Big Take from Bloomberg News. Today on the show on a day when oil has once again topped $100 a barrel, we talked to

3:09Liam Denning who writes about energy for Bloomberg opinion and Patricia Laya, Bloomberg's Andy's bureau chief about the Trump administration's plan for the US to take a stake in Venezuela's oil reserves. So late last month President Trump announced what he's calling the biggest oil deal in world history. Describe that deal in broad strokes if you would. Oh, broad strokes is all we've got. Really what the president was announcing was that the US government would be essentially going into some kind of joint venture or taking a stake in North American blue energy partners, a local Venezuelan operator, taking a 35% stake apparently. And that venture would develop 17 oil fields in Venezuela, which apparently sit upon 65 billion barrels of reserves, roughly a fifth of the country's touted oil reserves. And in return, the US seemingly would pay no money for this up front and would get 20%

4:16of any production at cost. And then a right of first refusal on the other 80%, which I assume would be in the event of some kind of major global disruption, the US would be able to claim that oil. How much does this announcement catch you by surprise? I think the fact that there was an announcement didn't surprise me. It's been clear since Trump authorized a military operation that removed Nicolomaduro in January that he sees this as very much facilitating some kind of oil deal. I think what has surprised me was the nature of it, the idea that the US is effectively going to form some kind of quasi national oil company with the federal government taking a direct stake. That did surprise me a lot. And I think it surprised a lot of people. Patti, what if we could review sort of how we got to where we are, how we got to the place where Delciutri guys could make this announcement? This has been a chaotic year in Venezuela to say the least.

5:17Right. So as we all know, Maduro was captured by his forces and the early hours of January 3rd. Delciutri guys was his vice president. In fact, she was vice president, finance minister, but as a president, she had all sort of roles, very important influential roles within the Maduro government. And constitutionally, once the president is gone, of course, she as vice president would take that role. But also, I think the US saw in Delciutri guys a more pragmatic, a tabista official through which they could heavily influence policy, right, over Venezuela. And how has that announcement played in Venezuela? What's the reaction been to it? So locally, it wasn't received very well. I mean, I think Interim Press in Delciutri guys has received criticism from both ends of the political spectrum. On the one hand, hardline, Chavista supporters see it as her gifting Venezuela's oil or sort of surrendering Venezuela's sovereignty over its oil reserves.

6:19On the opposition side, they are quite wary about this deal and about sort of the strengthening relationship between the US and Venezuela's Interim government and what that could mean in terms of entrenching Delciutri guys in power in the long term and the legitimacy she holds in signing such a long term agreement over Venezuela's oil resources. But Venezuela has really stressed that it would remain or retain sovereignty over these resources on their ground while the US has framed it differently. I guess all of this brings up a kind of really fundamental question as we try to make sense of this agreement, so much as we know about the details. And that is, does Delciutri guys have the legitimacy and the authority to sign off on a deal, like this one given the kind of interim position that she occupies right now? That is a huge question that everybody's asking because Mahouda was called illegitimate about the US before he was captured, right? And even the US said that the election that he says to have won in 2024 was completely

7:25fraudulent, right? And she was declared his vice president under the same election. So there are a lot of questions about whether she can sign this kind of agreement under an interim government, a much less one that ties the government for decades and decades to come. Patti, let me ask you just about the way that this is reverberating in the politics of Venezuela right now. So this month, the second round of political negotiations between the Tavistas and the opposition are sets to start. And in its fact, the White House was very careful in adding that they supported still those talks toward a democratic transition. That said, this has really shaken up the opposition, particularly the party of Maricorino Macal. She has been very careful, right? She has questioned the terms and Rodriguez's authority, but really stopped short of demanding the deal to be totally scrapped and said the US should be Venezuela's natural energy partner. I think she's wary about Trump's and the El Ciro de Riga's relationship and how this

8:29could entrench Rodriguez as a government and reduce the US incentive to press for quick elections in Venezuela. But I think she wants to present the opposition as a more credible long-term partner for Washington and international investors. So she's also come out and said her own proposals for what an energy partnership with Venezuela would be like, sort of contrasting the durability of investments that could take place under illegitimate and democratically elected government. She knows she wants to run for election in the future. She knows that she will need the US backing to do so. So she's walking a very careful and delicate line at the moment. Liam, how do you think about this question? Of course, there have been past governments in Venezuela that have famously nullified international oil deals. As you look at this one, is there anything in it that you see that could stop a future government from scrapping this one completely? Hmm.

9:30So this is the key question, right? The durability of any agreement. There was a really interesting line in the fact sheet that the White House released about this deal, which I think got a bit lost, where they said that getting large-scale investment into Venezuela's oil industry was a, quote, key precondition to any kind of democratic transition. It's important because, well, for two reasons. One is, it kind of tells you where the White House's priorities lie, which comes first. But the second is, I think they've got it backwards. Oil companies are no strangers to dealing with unsavory or unstable high-risk regimes. If you look at the first Venezuelan oil boom which ran from the 20s, basically through the 60s, I mean, for a lot of that period, Venezuela didn't have democratically elected governments. That didn't stop all companies doing business there. But in this case, the amount of money that has to be invested to rebuild Venezuela's

10:30industry, the nature of the oil resource itself, a lot of extra heavy oil, takes a lot of processing, the fact that it will take a very long time to even rebuild the power grid. You're asking all companies to go in for decades to do this and invest a huge amount of money. I mean, the government itself has talked about $100 billion to raise production by 1.5 million barrels a day, which, you know, you do that math. That's a pretty capital intensive proposition right there. And I think if you go back to when Maduro was first deposed, remember, Trump was pretty offended by the fact that Exxon said this country is basically uninvestable. He was expecting all companies to shake his hand, thank him, and just rush back in there. And of course, they didn't. And I think particularly in the context of high energy prices amid the war in Iran, the president is looking for a win here. And I think he feels that by doing this, he will somehow force the industry's hand.

11:35I think there may also be an aspect to this. You know, I was sort of mindful of the wreckage of the ballroom in the White House. You might think if this deal somehow passes muster within this administration, but we get a democratic administration starting in 2029, Trump's reasoning here may be, well, if we strike this deal and we get it going and we invest money or we advance loans. And basically, the federal government is at that point on the hook for this. Will a future administration really roll it back? Will a future Congress really roll it back? Just as if you knock down a ballroom and rebuild it, will someone else come and really tear it down later? Maybe not. But in fact, I think they've actually amplified the risk because you know, you're dealing with an unelected, unpopular regime in Venezuela. The US administration is itself facing potential setbacks in midterms that are about to land

12:35here. Trump's own term in office expires in just over two years. Which all company, which Western all company is really going to think, well, you know, if we go in now, sure, we're there for 30 years, everything's hunky-dory. No, probably not. More on the US's partner in Venezuela and the difficulties of making a deal they're durable after the break. Work one before you jump back in. You're listening for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use. ChatGPT for business can help. ChatGPT for business gives teams a shared workspace with admin controls, permissions, and access to work and codex in ChatGPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Follow the ChatGPT desktop app or contact sales to learn more.

13:40If your bookshelf and your for-you-page are equally important to your personality, welcome home. This is Pro's Society, the weekly podcast that's part book club, part group chat for thought daughters, pop culture obsessives, and anyone who thinks pride and prejudice and love island deserve the same level of discourse. I'm Eli Rallo and every week we're connecting the dots between books, the internet, and the conversations everyone can't stop having. I'm going to have to look up this story. I'm obsessed. I'm obsessed. From bestselling authors and your favorite book talk creators to the latest pop culture moments, nothing is off the table. So like if you can hide some real messages inside compelling characters and that is the Trojan horse, whether you're looking for literary deep dives, smart pop culture conversations, or a community of readers who love to think a little too much, you're in the right place. I'm obsessed into Pro's Society on the I Heart Radio app, Apple podcasts, or wherever you get your podcasts. See you between the pages.

14:40When I was 14 years old, I was kidnapped and health captive for nine months. I survived and I've spent my life exploring how other people survive what should have destroyed them. I'm Elizabeth Smart and these are the survivor files. I just remember this low taunting voice next to my ear saying, shut up, don't say anything. Every week I'm with survivors who lived through the unthinkable. I knew if he woke up without a doubt he was going to hurt me. I started feeling that there was someone at the end of my bed and I just started screaming. They are abducted, stalked, controlled, and nearly silenced. But these aren't stories about what's taken from them. Their story is about what it takes to make it out alive. Listen to the survivor files with Elizabeth Smart on the I Heart Radio app, Apple podcasts, or wherever you get your podcasts.

15:45The USS has taken a stake in the company at the center of this deal. North American Blue Energy Partners. Liam, what is it exactly? You tell me. It's a local operator run by this figure, Alejandro Abezancor, who is himself a controversial figure. But let's be honest, we're talking about a company that is now at the heart of an industry that is both critical to Venezuela's future and from the Trump administration's perspective, critical to US energy security. We know barely anything about it. I haven't even seen a balance sheet for this company that is supposedly going to lead $100 billion of investment in one of the most challenging oil development environments on Earth. We're not even sure exactly how legal the purported investment by the Pentagon is.

16:48It seems like the administration is really stretching the language. I'm going to pause there just to say that's a wild thing. You have the defense department holding a stake in this company. Yeah. My reading of the Office of Strategic Capital is that it's there to advance loans. It's mainly for critical minerals. I guess if you squint hard enough crude oil fits that description, but it's far from clear if any of this stuff would hold up if it were challenged in court. Patti, we're talking here about North American blue energy partners. Don't know a whole lot about that company or that concern. We do know something about the man who controls it. That's Alejandro Betancor. Tell us a bit about him if you would. Yeah. Alejandro Betancor is a well-known name to Venezuela's because he's part of a clan known as Bolly Chicos, which is a class of Venezuelan entrepreneurs who amassed huge fortunes on their president to go to our government. In his case, he won billions of dollars in emergency power equipment contracts beginning

17:50around 2009 during years in which Venezuela was plagued by chronic blackouts. He did this through a company called Dare Week, which ultimately came in under scrutiny in Venezuela, the US, Spain, and even other countries who suspected it has money laundering ties involving Pedro Esa Petróleo de Venezuela, the state-run oil company in Venezuela. Of course, Dare Week and Betancor have denied allegations. But since those days, Betancor has now assumed control of Venezuela's leading independent oil producer, which is now EEP. And by itself, I mean, Navep pumps about 200,000 barrels of crude a day in Venezuela, which is not a small amount for an independent producer in Latin America. So he, I think, to the Trump administration represents someone who has deep ties across both of Venezuela's political factions and also has sort of a proven track record of producing oil at a large scale in a very complicated country and also during the period of sanctions.

18:57I'm curious sort of how the major oil companies view this deal, what we know of how they've reacted to it and sort of the degree to which they were involved in this, if at all. I mean, my understanding is that they were not involved in this deal, per se. My read of it is that, look, they like the mood music here, right? They like the fact that there is this administration in Washington that is determined to reopen Venezuela, no production is as in the oil is there, but you know, we saw under the Chavista regime, you know, essentially the national oil company gutted of expertise. We saw the physical infrastructure run away production collapsing. So clearly there's a big opportunity there. I think for the oil companies, it's good to have Washington focused on reopening Venezuela, but I think they probably want to keep a fairly healthy distance from this other venture

20:00that's being talked about. How did given the hurdles and the complications that we've talked about both in the US and in Venezuela, what needs to happen for it to be a success? I think it will be quite challenging for this deal to be a success. I think many of these 17 fields are very far from the infrastructure that regularly operates at some level in Venezuela's oil production. Many of these fields will likely not even start production in the next year or even in the coming years. If anything, it could be deemed a success if it increases production maybe by 100,000 to 200,000 barrels by next year, but of course that will not have an impact on US field prices, that will not have an important effect on production oil production worldwide. So, I don't think it will have a meaningful impact for the US voter expecting to see meaningful consequences from what Trump called one of the biggest energy deals signed in recent

21:05time. If you liked this episode, make sure to follow and review the big take wherever you listen to podcasts, it helps people find the show. Thanks for listening, we'll be back tomorrow. Hello Los Angeles, it's Jill Weisenthal. And Tracy Alloy here from the Othlots podcast. So we are so excited to tell you that tickets are on sale available for our next live show in the city of Angels LA. We will be recording a live episode on September 17th at the Vermont and Hollywood. Get your tickets now at bloomberg.com slash Adlots and hope to see you there.

22:06It's fall in Jeep country and during the drive into fall sales events, get a great deal on four by fours that refuse to be contained, like Jeep Wrangler. This built into every drive with the most awarded SUV ever, Jeep Grand Cherokee, and freedom that can't be denied with the open air freedom and Jeep gladiator. After 85 years, it's no surprise that Jeep became America's SUV brand. Get a great deal during the Jeep drive into fall sales event. Jeep is one more awards over its lifetime than any other SUV brand, even the Jeep Grill or Registered Trademarks of FCAUS LLC. Shop Vons and Albertsons for fresh savings every time you shop. This week at Vons and Albertsons, get fresh, boneless, skinless chicken breasts for $199 per pound limit 10 pounds. And locally grown, grape-ary cotton candy grapes are $299 per pound with digital coupon. Plus 24 packs of Canada Dry or 7-Up 12-ounce cans are $499 limit 1 with digital coupon. Enjoy fresh and delicious savings for every meal. Hurry in, these deals won't last. Visit vonsoralbertons.com for more deals and ways to save.