Donald Trump has long coveted the oilfields of other nations and declared an agreement with Venezuela to be “the biggest oil deal in world history”. But the deal, reached after the US seized Venezuelan president Nicolás Maduro, is almost certainly doomed to collapse amid a wide array of legal and logistical issues, a Guardian investigation has found.

The US president first mused about taking oil from Iran in 1987, when he told ABC’s Barbara Walters that Iranian attacks on American shipping during the Iran-Iraq war required an extreme response. “Why couldn’t we go in and take over some of their oil, which is along the sea?” he asked. Over the ensuing years, he has returned frequently to the idea that America should seize oil from other countries after military conflict, from Libya to Iraq.

Earlier this year, Trump finally got a chance to enact his plan – at gunpoint. US forces stormed Venezuela in January and seized Maduro, who was quickly shuttled to a federal holding facility in the US and replaced by the compliant Delcy Rodríguez. Trump told the Atlantic in the days following the raid that “if [Rodríguez] doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro.”

Then in August, Trump announced that the office of strategic capital at the Pentagon, which he has rapidly transformed, would own a third of the second-biggest private Venezuelan oil firm, North American Blue Energy Partners (Nabep). Trump said the deal means he’ll soon refill the Strategic Petroleum Reserve, which dropped to a longtime low after the US invaded Iran.

But virtually everything Trump and his cabinet have said about the deal is false and misleading, according to the experts and officials who spoke with the Guardian. The Venezuelan law governing oil development does not allow for 100-year deals, or anything over 25 years. The office of strategic capital isn’t authorized in US law, experts say, to own shares in companies. Moreover, they say, the deal as structured won’t bring new capital to Venezuela’s oil sector.

And contrary to Trump’s claims, the Venezuelan oil will not help refill the US Strategic Petroleum Reserve any time in the near future.

There is also a curious figure at the center of the deal: Alejandro Betancourt López, the affable Venezuelan with a complex background who is becoming a partner of the US government as the owner of Nabep.

Betancourt, 46, went to college in Massachusetts and has homes in Spain, the UK and New York City. He has a history in Venezuela’s energy and oil sector, owns a sunglasses company, and once had Rudy Giuliani as his lawyer.

Betancourt, who has been drawn into multiple international investigations in connection with Venezuelan corruption allegations, was brought into the deal by a private associate of Marco Rubio, according to three people who know him. Betancourt has never been charged with or convicted of any crime.

The Guardian has learned that Venezuelan government officials who are now in charge once hired investigators and hackers to dig into the source of Betancourt’s money.

Experts are ultimately skeptical the oil deal can hold together. “The deal is like the big beautiful wall that Mexico will pay for,” said former US diplomat John Feeley.

‘Skin in the game’

It was less than a month after the January US raid that toppled Maduro that Exxon’s CEO Darren Woods said the country was “uninvestable” because of the “legal and commercial constructs and frameworks in place today”.

Two people familiar with the process said Trump began looking for a way to make sure the US had “skin in the game” – financial ownership that would put investors at ease. The potential answer became the US stake in Betancourt’s firm, North American Blue Energy Partners.

Though the White House and defense department say it’s 35% ownership, the Pentagon told lawmakers on the congressional armed services committees in a written briefing seen by the Guardian it has “warrants” in Nabep: rights to purchase shares, rather than the shares themselves.

The state department, the administration says, will also have a right to buy 20% of all the oil Nabep pumps, at cost – meaning it should be able to buy it cheaper than the market price.

“The Departments of State and War have negotiated a historic opportunity to secure U.S. majority control of more than 65bn barrels of proven oil reserves in Venezuela at zero taxpayer cost,” A Pentagon spokesperson said.

It’s unclear how the US would buy crude oil, or what the process would be. The state department, for its part, insists: “This is a private deal with a private company. It’s not a deal with the interim government of Venezuela and there was not a political process included in the negotiations.”

That appears to conflict with Trump’s initial announcement, which said: “The United States of America has just entered into an Agreement with the Country of Venezuela.” The administration says the board of Nabep, which is incorporated in Barbados, will have a majority of US citizens.

The Pentagon ownership has been one of the most puzzling parts of the deal, because the idea that the Department of Defense could own more than a third of a Venezuelan oil company, or any oil company, would have been unthinkable in any previous US administration. Prior to Trump, the defense department had never operated like a private equity fund that could directly own percentages of foreign companies.

But the Pentagon has been transformed. The office of strategic capital (OSC) is under the authority of deputy defense secretary Stephen Feinberg, a powerful billionaire who wields the real financial power in the Pentagon and has surrounded himself with former employees from private equity giant Cerberus, as the Guardian has reported. Feinberg installed a former Cerberus employee, David Lorch, as the head of OSC.

The Trump administration is using a 1950s law called the Defense Production Act to allow the Pentagon to become a kind of giant investment fund. “It has turned them into a vehicle for ownership of substantial domestic and international companies,” said the former official.

A former Pentagon official familiar with the project said Feinberg and Lorch structured the financial end of Trump’s Venezuela deal. “It is absolutely a Feinberg project,” said the former Pentagon official.

However, the law that created the OSC actually didn’t authorize it to make equity investments, and the Pentagon’s spokesperson told Reuters: “The Office of ​Strategic Capital (OSC) ⁠does not take equity stakes in private companies” in August.

“Congress clearly doesn’t believe that it has given the power to OSC to make equity investments,” said Ashley Deeks, the vice dean of the University of Virginia law school, who has written about US government ownership stakes in companies for the Harvard National Security Journal.

Since the OSC is not authorised to invest in shares of private companies, the Nabep ownership will be held by an entirely different Pentagon office, called the Industrial Base Analysis and Sustainment (Ibas), according to the former Pentagon official.

But the mission of Ibas has nothing to do with oil. Its job, as it says on its website, is solely to “strengthen the U.S. Defense Industrial Base”.

That incongruity is just one of the reasons major oil companies and investors privately say they are keeping clear of this deal, said Phil Gunson of the International Crisis Group, who has been briefed on the problem. “They are concerned about the irregularities. They are concerned about the terms of the deal. It’s the opacity of the agreement that has serious investors concerned,” he said.

“Whether the Pentagon has the authority to act in this way is debatable,” he added.

The White House directed questions about whether the OSC is authorized to own shares to the defense department. The department didn’t answer emailed questions about the matter. In a statement, a representative merely repeated some prior claims by the administration: it’s a “historic opportunity”, with control over most of Venezuela’s oil reserves.

The length of the deal also doesn’t appear to be as long as the administration claims. Venezuelan legal expert Jose Ignacio Hernández says Venezuelan law is crystal clear that this is impossible, and Venezuela’s government itself has said the deal is 25 years, not 100.

“This is all just propaganda,” said Ignacio Hernández. “It cannot be implemented as announced by the administration.”

The man in the middle

Those who have met Alejandro Betancourt say he is remarkably pleasant and obliging. “He was a really nice guy,” says Lev Parnas, the former Giuliani associate who broke from Maga after his arrest in 2019, and who traveled with Betancourt. “I don’t like too many people but I like him, his wife, his family.”

“Betancourt, he’s a good sales guy,” said another American who has known him for years. Secretary of state Marco Rubio told an interviewer in early September that Betancourt had a “track record” of producing oil.

Some view him as an effective businessman who can deal with a variety of administrations and has experience both in energy and oil deals.

In 2012, Betancourt bought El Alamín castle in Spain, a vast estate with its own tennis court and soccer field, according to aerial photos. The castle has become a venue to host meetings with prominent business leaders and politicians, El País reported.

Betancourt has been a subject of scandal for well over a decade. Public scrutiny of Betancourt first emerged in the US in 2013, when a former US ambassador to Venezuela, Otto Reich, laid out a series of allegations in a civil lawsuit, including violations of the Racketeer Influenced and Corrupt Organizations (Rico) Act, which targets organized crime, and defamation, in New York federal court. Along with his partners in a company called Derwick Associates, Betancourt made his money in building electrical plants in contracts he won by kickbacks, according to Reich’s complaint. The Rico claims were dismissed when the court found that Reich failed to establish a legal “pattern of racketeering”, and the defamation claims were rejected for lack of jurisdiction.

In a letter to the Guardian, Betancourt’s lawyer Vel Freedman wrote that “Neither Derwick nor Mr. Betancourt ever asked, directed, or encouraged anyone to pay a bribe.”

In 2018, Betancourt’s cousin, a business partner also affiliated with Derwick, was charged in a $1.2bn money laundering case in federal court in Miami. An affidavit submitted by an agent with Homeland Security Investigations cited an unnamed “conspirator 2”, who he said received hundreds of millions in laundered funds with the cousin, who is still a fugitive in the case.

The Miami Herald reported it was Betancourt. In a letter to the Guardian, Betancourt’s lawyer wrote: “Mr. Betancourt has never been charged with a crime in the United States. He has never been named as a defendant. The United States government has never sought his extradition, and the United States government has never publicly identified him as a target, as an unnamed co-conspirator, or as any numbered conspirator in any charging instrument.”

Secretary of state Marco Rubio told a Venezuelan radio interviewer Betancourt was not the subject of a US probe. “There was no investigation within our system against him.”

In the height of Trump’s first term, Betancourt hired Giuliani, then Trump’s personal lawyer, as his own lawyer.

His relationship with Venezuela’s government has see-sawed over the years. According to two people familiar with the situation, Venezuelan authorities were so concerned over allegations about Betancourt’s finances that they hired a team of lawyers and investigators who began an intense investigation to try to track his money.

Betancourt’s attorney said the businessman never misappropriated money.

The investigators hired by Venezuela even used hackers to try to trace his funds. A source familiar with the hacking project said their intrusion was extensive. “His WhatsApp”, they said, “‘His accountants, his lawyers, everything.”

Corporate computer hacking was a well-known investigative tool, though usually illegal, at the time. A 2021 document obtained by the Guardian, prepared by a group of hackers, shows a list of Venezuelan targets. It lists Betancourt as a “secondary” target.

Betancourt’s lawyer didn’t confirm the hacking, but he said that Betancourt was a major supporter of the interim opposition government backed by the US. If it happened, he said, any hacking effort “belongs in the context of Mr. Betancourt’s opposition to the Maduro regime”, rather than as a legitimate financial investigation.

The Venezuelan ministry of communications and information did not respond to an emailed request for comment.

By 2024, he was involved in drilling again in Venezuela, with Nabep, the company he owned at the time with Harry Sargeant, an American oil executive. The company started small, at just 23,000 barrels per day, according to recent statements by Venezuela’s interim president.

In September 2025, Spanish police descended on his castle in connection with a money laundering investigation, according to Spanish press accounts.

But at about that time, officials in the Trump administration were already in touch with Betancourt about the pressure on Venezuela’s government, according to a former official, as well as a businessman who was aware of it. Betancourt’s lawyer wrote that the Spanish investigation “has never resulted in any charge against Mr. Betancourt”. The Guardian was not able to confirm the status of the investigation.

By 3 January, when Maduro was arrested in the US raid, a source who was involved said Betancourt played a crucial role in negotiations with Delcy Rodríguez. Betancourt’s lawyer wrote to the Guardian that Betancourt functioned as a go-between. “There was no established channel of trust between Venezuela’s interim government and the United States. Both sides spoke with Mr. Betancourt, because each knew him and each was prepared to rely on him, and he facilitated communications between them.”

What many people familiar with Venezuela’s recent history question is why the US government is going into business with Betancourt given his substantial baggage.

“The only discernible winner in any of this is Betancourt,” said a businessman who has spent years on Venezuelan issues.

For Trump, the issue is simple. “It was a war, but it’s perhaps the biggest deal ever made,” he told the United Nations this week. “To the victor belong the spoils. You’ve all heard that.”