The Trump administration is utilizing a little-known Pentagon office to secure a 35% equity stake in a Venezuelan oil venture, raising questions about executive authority and state-led capitalism.
The Trump administration has moved to integrate national security and energy production by securing a 35% equity stake in a private Venezuelan oil venture. The deal, announced by the White House, utilizes the Pentagon’s Office of Strategic Capital (OSC) to obtain ownership and governance rights over North American Blue Energy Partners (NABEP). This firm holds 100-year concessions for 17 Venezuelan oil fields containing an estimated 65 billion barrels. This maneuver represents a significant departure from traditional defense procurement, blurring the lines between military readiness and global energy markets.
Under the terms of the agreement, the U.S. government secures 20% of NABEP’s output at production cost, with the State Department holding a right of first refusal on the remaining 80%. The administration intends to use these resources to replenish the Strategic Petroleum Reserve and supply sensitive military operations. Governance provisions further embed U.S. control, granting the federal government veto power over board members and requiring the use of American auditors and legal counsel. By subjecting the agreement to U.S. law and court jurisdiction, the administration is effectively embedding national security controls inside a foreign private oil operator.
The transaction is structured through “penny warrants,” a financial mechanism intended to provide the U.S. with significant dividends and equity value at minimal upfront cost to taxpayers. However, the move has sparked a legal and policy debate regarding the statutory limits of the OSC. While a Pentagon spokesperson initially stated the office is limited to providing loans and technical assistance, other officials claim equity authority was established by statute during the Biden administration. This discrepancy highlights a growing tension over the expansion of the administrative state into private markets and the potential for bureaucratic overreach without clear congressional mandates.
This shift toward state-led capitalism coincides with a series of executive orders aimed at centralizing economic and industrial power. On September 8, President Trump signed an order adjusting delegations under the Defense Production Act (DPA), which allows the President to prioritize and allocate industrial production for national security. By shifting these authorities between the White House, Pentagon, and Commerce Department, the administration is consolidating its ability to compel private industry participation in its strategic goals. These actions suggest a broader strategy of using executive instruments to direct private industry toward national security objectives, often bypassing traditional legislative debate.
Simultaneously, the administration faces internal friction and congressional scrutiny. Defense Secretary Pete Hegseth recently removed at least six Army officers from a promotion list to two-star generals, contributing to the resignation of Army Secretary Dan Driscoll on September 2. Senate Republicans, including Thom Tillis, have expressed concern over the management of the military, with Tillis calling for Hegseth’s dismissal. Senate Majority Leader John Thune also warned that high prices and low approval ratings could jeopardize the party’s Senate majority, suggesting that the administration’s bold foreign ventures are occurring against a backdrop of domestic political fragility.
As the administration moves to solidify its control over foreign energy assets through Executive Order 14373, which manages Venezuelan oil revenues, these domestic political and legal challenges may complicate the long-term viability of the venture. While the White House frames the deal as a “zero cost” win for taxpayers, the unprecedented use of a defense office to anchor history’s largest oil deal in Venezuela ensures that the Office of Strategic Capital will remain under the microscope of constitutionalists and policy critics alike. The integration of energy security into military supply planning marks a new era of executive power that challenges the traditional boundaries of the American administrative state.
Miles Harrington serves as the Senior Correspondent for Federal Systems & Executive Power at Just Right News, where he brings a disciplined, constitutionalist lens to the inner workings of the American government. With a focus on the mechanics of the federal bureaucracy and the limits of executive authority, Harrington has established himself as a vital voice for readers who value transparency, accountability, and the preservation of the separation of powers.
A native of Richmond, Virginia, Harrington’s perspective is deeply rooted in the traditions of the Old Dominion. Growing up in a city defined by its historical significance and its role as a center of American jurisprudence, he developed an early appreciation for the foundational principles of the Republic. His upbringing in Richmond—a place where the legacy of the Founding Fathers is woven into the landscape—instilled in him a belief that the federal government should remain within its constitutional bounds. This background informs his skepticism of centralized overreach and his commitment to reporting on the ways in which the administrative state impacts the lives of everyday citizens.
In his current role, Harrington specializes in the complexities of federal systems. He doesn’t just report on the headlines of the day; he digs into the structural shifts within the executive branch that often go unnoticed by the mainstream press. Whether he is analyzing the implications of a new federal regulation or investigating the expansion of agency jurisdiction, his work is characterized by a rigorous adherence to the facts and a dedication to the rule of law.
Harrington is perhaps best known for his signature feature series, “How Washington Works.” Through this ongoing project, he demystifies the often-opaque processes of the nation’s capital, pulling back the curtain on the “Deep State” and the unelected officials who wield significant influence over national policy. By breaking down complex legislative maneuvers and executive orders, he empowers Just Right News readers to understand the true levers of power in Washington. His reporting serves as a necessary check on the federal government, ensuring that the actions of those in power are held up to the light of public scrutiny.
Now based in Washington, D.C., Harrington operates at the epicenter of the political world, yet he remains intentionally distanced from the “Beltway bubble.” His proximity to the halls of power allows him to maintain a robust network of sources across the federal landscape, but his heart remains in the principled conservatism of his Virginia roots. He views his role not merely as a reporter, but as a steward of the public trust, dedicated to providing the clarity and context that conservative voters need to navigate an increasingly complex political environment.
Through his sharp analysis and unwavering commitment to the truth, Miles Harrington continues to be a cornerstone of the Just Right News team. His work ensures that the principles of limited government and executive restraint remain at the forefront of the national conversation, providing a crucial service to those who believe in a government that is truly of, by, and for the people.