US officials defend Venezuela oil deal, say agreement part of path to democracy

U.S. officials on Tuesday defended Washington's deal to take a large stake in a venture to operate oilfields in Venezuela and the businessman who will run it, casting the pact as part of a process ‌to align the country's energy industry with U.S. interests while helping rebuild a nation hollowed out by decades of corruption. The U.S. announced a sweeping agreement to take over around a fifth of Venezuela's oil reserves last week. Skeptics have questioned aspects of the deal, particularly 14 contracts granted to U.S.-backed North American Blue Energy Partners (NABEP), controlled by Venezuelan businessman Alejandro Betancourt, without a competitive process.

The structure of the deal and central role of Betancourt, who ‌has been investigated by U.S. and European authorities though never charged over past dealings in Venezuela, have also prompted hesitation from some oil companies weighing investments in the country, Reuters reported on Monday. Speaking to ‌reporters, one of the officials said the deal, which includes a 100-year lease on 17 large oilfields, is "a geopolitical opportunity to secure fields that primarily had largely been under the influence of Chinese and Russian companies."

Pressed on Betancourt, the official said the businessman had been vetted and that "there are no charges he's facing in the United States for violation of any of our laws." "I'm not nominating anyone for sainthood here," the official said. "Geopolitics is often not a choice between the ideal and the imperfect. It is often, you're trying ⁠to navigate ​what's the best outcome, and you have to work with ⁠the factors that you have in place."

According to the officials, private companies like NABEP are not required to pass through a competitive process to partner, even with a U.S. government entity. "The fact that they chose to partner with the U.S. government, instead of ⁠Exxon, Chevron, Conoco, the Chinese or the Russians, I think is a positive," one of them said. Experts have expressed doubts over the deal's legality, especially since the U.S., not Venezuela, is set to select the model and companies to operate the ​fields. U.S. oil company sources told Reuters that the deal raises concerns that they would face competition from the U.S. government.

The White House has struggled to deal with voter anger over rising fuel ⁠costs after the U.S. and Israel launched attacks on Iran in late February, igniting a protracted conflict that has closed the Strait of Hormuz, formerly used to transit one-fifth of the world's oil and gas supply. The average price of gasoline in the U.S. currently ⁠exceeds $4 ​a gallon headed into Labor Day and the coming midterm elections in November.

RETURN TO DEMOCRACY The officials tied the deal to what they called a desire to bring about a "stable, democratic Venezuela." They said the broader effort needed to culminate with elections in the South American country, which are not feasible in the short term.

"The last thing we want to see is a new democratically elected government inherit a country in ⁠crisis," one of the officials said, adding that the next phase of political talks between government and opposition leaders regarding a democratic transition in Venezuela will resume in mid-September. "One of the most important things ⁠to do is to have a country that can turn ⁠not into a one-time election or a two-time election, but a stable democracy, a stable republic, that can conduct elections on a repeated basis," the official continued. "You need a free and open press."

One of the officials said that U.S. Energy Secretary Chris Wright is traveling today to Venezuela, where Chevron will sign a ‌separate agreement to expand its ‌operations in the country on Wednesday.