The US government plans to acquire a 35% passive stake in Alejandro Betancourt's North American Blue Energy Partners and secure preferential rights to buy 20% of the company's oil production in Venezuela at cost, The Wall Street Journal reported over the weekend, citing people involved in negotiating the agreement.

The company is expected to have the opportunity to develop 17 oil fields with reported reserves of 65 billion barrels of oil, according to the report.

The US Department of Defense's Office of Strategic Capital plans to structure the investment through penny warrants, allowing the government to obtain an equity stake without making a major capital investment, the report said, citing unnamed sources.

The US government picked Betancourt because he is viewed as uniquely positioned to implement the project, as his company already operates in Venezuela and he has close relationships with senior government officials in the country, the sources reportedly said.

The Department of Defense did not immediately respond to requests for comment from MT Newswires.

(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.)