Democratic senators challenge Pentagon stake in Venezuelan oil producer
Four senators tell Rubio, Hegseth and Wright to hand over the full terms of a Pentagon plan to take a 35% stake in Venezuela's second-largest oil producer
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Senators Jeanne Shaheen, Jack Reed, Martin Heinrich and Elizabeth Warren sent a letter Wednesday challenging a Pentagon plan to acquire a 35% stake in North American Blue Energy Partners, Venezuela's second-largest oil producer, according to the Wall Street Journal, reported by Quartz.
The arrangement would give NABEP control over 17 oil blocks believed to hold about 65 billion barrels of oil, according to Yahoo News. Under the deal, the State Department would get preferential rights to buy 20% of NABEP's output at cost, Yahoo News reported.
The letter, addressed to Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Energy Secretary Chris Wright, argues that nothing in the law creating the Pentagon's Office of Strategic Capital allows it to take ownership stakes in foreign oil companies, according to Quartz. The senators say the office was set up only to issue loans and guarantees tied to national security goals, and they are demanding the full text of the deal, its legal rationale, and details on how the State Department would pay for the oil before anything is finalized, Quartz reported.
Administration officials have described the deal as a way to lower fuel prices and rebuild the Strategic Petroleum Reserve, which sits at its lowest level since 1982, according to Yahoo News. No public reply from the administration had been reported as of Thursday, according to the Rio Times Online.
The scrutiny adds a political overhang to the wider US push to secure Venezuelan crude, which also includes Exxon's preliminary agreement with PDVSA and Chevron's existing commitment. Questions about Pentagon involvement could slow the sanctions relief and operational steps needed to bring that oil to market, even though no production or shipment has yet been affected. The challenge is a reminder that execution risk in Venezuela remains as much political as logistical, with congressional pushback now added to the infrastructure and sanctions hurdles already facing the Exxon and Chevron deals.