STOCKS | Trump-Backed Venezuela Oil Deal Faces $100 Billion Funding Question

The Trump-promoted Venezuela oil deal still needs about $100 billion in capital over the coming years for infrastructure tied to oil extraction. According to Sina Finance, the biggest unresolved issue is where all of that money will come from. A U.S. official said the focus is on using U.S. backing to help the company attract the capital needed to quickly raise crude output, while the U.S. government will not put in any fiscal funds. The company in charge of raising money and drilling is North America Blue Energy Partners (NABEP), a Venezuelan private company now acting as a U.S. partner. The deal gives NABEP the lease to the relevant oil fields, while the U.S. government receives a 35% stake in the joint venture and the right to buy 20% of the company’s future crude output at production cost. It also keeps an option to buy the remaining 80% of new output at market prices. According to the company, it plans to expand quickly in Lake Maracaibo and the Orinoco heavy oil belt, with a short-term goal of lifting crude output to more than 1 million barrels per day. NABEP has already increased production from about 18,000 barrels per day to 200,000 barrels per day in recent years and plans to deploy more than 50 drilling rigs. Trump said the agreement would sharply lower gasoline prices for all Americans and added that output would rise faster than experts expect. The White House said the goal is to secure a stable supply of low-cost crude, help replenish the Strategic Petroleum Reserve, and avoid spending any U.S. taxpayer money.