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Market Chatter: Pentagon Weighs Venezuela Oil Partnership Covering 17 Fields

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The US Department of Defense is weighing a partnership with Venezuelan energy investor Alejandro Betancourt that could give the US government a major stake in Venezuela's oil reserves, Bloomberg reported Friday, citing people familiar with the matter.

The talks cover up to 17 oil fields across Venezuela's main petroleum basins, including Junin in the Orinoco heavy-oil region and fields around Lake Maracaibo, people familiar with the matter said. One of the potential arrangements under negotiations would see the US take a 100-year lease on the fields, Bloomberg reported.

According to the report, the Pentagon's Office of Strategic Capital is under consideration to oversee the investment, and could also help address supply-chain gaps. The Biden administration established the OSC in 2022 to support the development of critical technologies.

In an emailed response to, the Pentagon pushed back on the characterization of the potential deal.

The Office of Strategic Capital does not take equity stakes in private companies and can only provide loans, loan guarantees or technical assistance under its statutory authority, Chief Pentagon Spokesman Sean Parnell toldin an emailed response.

He noted that the OSC's capital assistance purview also included transaction structuring to develop and finance investments.

"Before any capital assistance is provided or loan is disbursed, OSC conducts extensive due diligence and comprehensive legal review of potential transactions to fulfill all applicable legal and regulatory requirements," Pentagon Press Secretary Kingsley Wilson told.

She added that the Department cannot comment on the specific commercial, contractual, financial, technical, or legal considerations raised during the conditional loan commitment process to protect the integrity of that process and the proprietary, non-public information of actual or potential borrowers.

Deputy Pentagon Press Secretary Jacob Bliss toldthat the OSC operates under a multi-layered legal and regulatory framework and complies with all applicable laws.

The White House and Venezuelan oil producer North American Blue Energy, which is controlled by Betancourt, did not immediately reply to' requests for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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