STOCKS | Pentagon Secures Right to Buy 20% of Venezuela Oil Output at Cost

The Pentagon has secured priority rights to buy crude from 17 Venezuelan oil fields and, under a new agreement, can purchase 20% of output at cost rather than market price. According to Sina Finance, the report said the Pentagon has a separate priority right to buy oil extracted by NABEP, with the remaining output to be purchased at market prices. The report also said the Pentagon obtained a 35% stake in the joint venture. According to Sina Finance, the deal uses special rights to buy equity at a symbolic price to protect the U.S. stake from dilution as the project attracts billions of dollars in outside investment, and to allow Washington to receive dividends from the start. The United States and Venezuela previously announced a historic agreement involving investment in Venezuela and higher oil output. Venezuela's acting president, Delcy Rodriguez, said the alliance would help sharply increase oil production with private-sector participation. The agreement covers development of 17 strategic oil fields with proven reserves of 65 billion barrels, investment of more than $100 billion, and more than $200 billion in tax revenue for Venezuela.