US to acquire 35% stake in Venezuelan oil firm
What's the story
The US government is planning to acquire a 35% passive stake in North American Blue Energy Partners, an energy company owned by Venezuelan businessman Alejandro Betancourt. According to The Wall Street Journal (WSJ), the deal also includes preferential rights for the US to buy 20% of the company's production at cost price. The investment will be structured through penny warrants that would give the US equity ownership in the business without major capital outlay.
Investment management
Investment to be structured through penny warrants
The Pentagon's Office of Strategic Capital (OSC) will structure the investment.
This is a strategic move by the US government as it looks to strengthen its position in global energy markets.
The decision comes just a day after President Donald Trump announced that the US would take control of one-fifth of Venezuela's vast oil reserves.
Oil control
Pentagon clarifies OSC's role
Trump had said that the US had secured majority control of over 65 billion barrels of Venezuela's proven oil reserves through a partnership with private business.
However, Pentagon spokesperson Sean Parnell clarified that the OSC does not take equity stakes in private companies.
He said their role is limited to providing capital assistance in the form of a loan, loan guarantee, or technical assistance for developing and financing investments.