Trump, Venezuelan Oil, and National Security

What President Donald Trump called “the biggest oil deal in world history” when it was announced last week is not the only highly favorable deal his administration has made with the “interim authorities” in Venezuela. Last May, it was announced that the global commodities firm Mercuria Energy Group had secured outtake agreements covering much of Venezuela’s extensive mineral holdings. Gold grabbed the headlines, but nickel, aluminum, coltan, and other critical minerals essential for electric vehicles, artificial intelligence, and modern defense systems are the real strategic gains to ensure more secure supply chains for American manufacturing. While private capital is essential for developing these resources, the true direction is coming from the U.S. government to make sure our country benefits. This is the purpose of the National Energy Dominance Council created by President Trump with an eye on the rivalry for control of global resources that is driving plans in Beijing and Moscow as well as in Washington. The Treasury Department will exercise oversight of all transactions.

The oil deal with Venezuela takes this oversight even further. Under the agreement, North American Blue Energy Partners (NABEP), a privately held oil company that is the second-largest private Venezuelan oil producer, was given a 100-year concessions for 17 oil fields with proven reserves of approximately 65 billion barrels. In turn, NABEP “granted the U.S. Department of War’s Office of Strategic Capital a 35% equity stake in its corporate parent, representing up to hundreds of billions in value and dividends for the United States.” This is called “golden shares” and has been common in many other countries to secure strategic assets for the national interest. Golden shares give governments veto power over corporate actions that could jeopardize economic or national security or move productive assets out of the country and into foreign hands. President Trump first used this measure in the merger of U.S. Steel and Nippon Steel to mandate that American steelmaking capacity would not be moved overseas.

Golden shares have been denounced as “protectionist” by globalists who want the freedom to operate without regard to national consequences. However, we have experienced the grim decades when the globalist ideology held sway in Washington, and huge sections of the nation’s industrial base were allowed to be moved overseas. We became dependent on untrustworthy “others” and hamstrung in mobilizing in a crisis. We are in dire need of “protectionism” both to rebuild core capabilities and create new ones. Foreign governments also complain that their interests are harmed, as China has done in regard to the Venezuela oil deal. But the U.S. government is properly concerned first and foremost with the protection of national interests. Given the rivalry between America and China, Beijing’s objections are only another indicator of the success of President Trump’s policies.