The United States has taken a novel approach to reviving Venezuela’s struggling oil sector by entering into a partnership with Alejandro Betancourt, a prominent and controversial Venezuelan businessman. This move marks a significant departure from traditional methods and is part of the Trump administration’s wider strategy to reengage with Venezuela’s energy industry despite ongoing political uncertainties.

Following a failed January operation aimed at capturing Venezuelan President Nicolás Maduro, former U.S. President Donald Trump had forecast a surge in investment into Venezuela’s oil production. However, progress has been slow. Decades of mismanagement and corruption under the administrations of Hugo Chávez and Maduro have left much of Venezuela’s oil infrastructure depleted and many wells nonoperational. Extracting oil from these reserves is complex and costly, and many major oil companies remain hesitant due to the country’s unstable political environment.

Recently, Chevron committed $7 billion to more than double its Venezuelan output, signaling some renewed confidence in the sector. Yet, the Trump administration sees this as insufficient to quickly restore production levels. Officials suggest two potential paths forward: encouraging early democratic elections to establish a government with legitimate political authority, or pursuing unconventional dealmaking to accelerate investment in the short term.

Opting for the latter, the U.S. has struck a deal granting a 35 percent stake in North American Blue Energy Partners — a company controlled by Betancourt — involving rights to 17 oilfields that represent approximately one-fifth of Venezuela’s oil reserves. Betancourt is actively seeking further investors to capitalize on these concessions.

From Washington’s perspective, this arrangement offers clear benefits. It provides oil companies with a more reliable point of entry into Venezuela’s oil sector by circumventing PDVSA, the state-owned oil company known for inefficiency and political interference. Moreover, the U.S. investment is managed through the Pentagon’s Office of Strategic Capital, which can offer financial guarantees to investors, thereby reducing perceived risk.

However, the agreement faces significant challenges. Its legal standing remains uncertain in both Venezuela and the U.S., drawing criticism from some members of Congress who question the authority behind the deal. Betancourt himself is a divisive figure within Venezuelan opposition circles due to his wealth accumulation during the Chávez era, often viewed as benefiting from favorable government arrangements. This reputation has raised doubts about whether the deal will withstand political scrutiny, especially if future elections produce a government less sympathetic to the current arrangement.

Industry experts note that large-scale oil investment demands a stable political environment and clear legitimacy. While the administration’s strategy may yield rapid engagement, many argue that the long-term restoration of Venezuela’s oil industry ultimately depends on credible political transition. Without an elected government able to enact reforms with broad support, the sector’s recovery—and the U.S. role in it—remain uncertain.