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US investment groups are racing to capitalise on Donald Trump’s ousting of communist leader Nicolás Maduro in January, setting up funds and targeting underutilised oilfields in the Latin American nation.
Lionheart Capital, a Miami-based investment fund founded by Ophir Sternberg, is among the early movers. It has signed a letter of intent aimed at merging its publicly listed affiliate Lionheart Holdings with Keo Energy, a group with oil assets in the Maracaibo Basin in northwestern Venezuela.
A source with knowledge of the proposed transaction said the merger would create the first Nasdaq-listed company that would provide US and institutional investors direct access to high-quality Venezuelan oil assets. Lionheart plans to list the oil company at about a $1bn valuation through a merger with its Lionheart Holdings blank-cheque vehicle, which raised $230mn in a 2024 public offering.
A source said that while Lionheart had opened preliminary talks with Keo Energy, no deal had been finalised and talks could still fall apart. Lionheart Holdings is planning a shareholder vote next week to allow it more time to find an acquisition candidate; otherwise, it might be forced to wind down and return cash to investors.
Keo Energy, a subsidiary of Sweden’s Maha Capital, owns a 40 per cent stake in Venezuelan oil company PetroUrdaneta, which controls onshore oilfields that in the 1950s produced hundreds of thousands of barrels of oil per day. Decades of low investment have caused production to fall to under 2,000 barrels of oil per day at the assets, which are 60 per cent owned by Venezuela’s state oil company PDVSA.
PetroUrdaneta’s production could rise to 54,000 barrels of oil equivalent per day by 2029 with new investment, according to a presentation to investors seen by the FT.
Washington has lifted sanctions enabling US firms to invest in Venezuela’s oil sector following its daring military raid in January to apprehend Maduro. Venezuelan authorities in January passed a new hydrocarbons law that drastically weakens state oil firm PDVSA and allows private companies to operate wells directly.
Since then, majors including Repsol, Eni and Shell have made agreements as local oil executives have been flying around the country on private jets in hope of inking deals as the sector reopens.
US investment groups are also answering Trump’s call in January for companies to invest $100bn to help rebuild Venezuela’s oil industry, which at its peak in the 1970s produced 3.5mn barrels per day. After decades of corruption and mismanagement in the country, oil production has fallen to about 1.2mn barrels per day.
Bryan Sheffield, who was one of two dozen oil executives and financiers who attended a White House summit in January aimed at drumming up investment in Venezuela, told the FT he visited the country in April with other potential investors to meet Venezuela’s interim president Delcy Rodríguez.
“We talked about the oil and gas business and what it could mean for Venezuela, and it could be a game-changer,” said Sheffield, who is co-founder of Austin-based private equity group Formentera Partners.
Formentera has made no final decision to invest but has sent a team to assess opportunities, he added.
Ali Moshiri, Chevron’s former head of Latin American operations, told the FT his Amos Global Energy Management fund is seeking to raise $2bn and had identified multiple Venezuelan oil assets for investment.
The surge in overseas interest has electrified the local oil industry in Venezuela.
An oil executive in Maracaibo said: “My phone hasn’t stopped ringing . . . Banks want to lend and people want to make deals.”
One fund manager in Caracas said the war in Iran had boosted interest in Venezuela. “It’s unbelievable: the Middle East is on fire and Venezuela is stable,” he said.
Some investment funds are looking outside the energy industry for opportunities.
Last month a financial group with ties to US President Donald Trump’s family, Yorkville Advisors, set up a Spac that plans to raise $200mn to buy a business in Venezuela.
Grupo Cisneros, a Miami-based Venezuelan media conglomerate, said it in April that it had secured two-thirds of a $1bn fund to invest in Venezuela. The US-based fund, known as Intrépida, will focus on investments outside the mining and oil sectors, including in the agribusiness, communications and real estate sectors, the company’s CEO Adriana Cisneros has said.
The Cisneros family is one of Venezuela’s best-known business dynasties, and has for decades had media interests in Venezuela. Now it is seeking to position itself as a vehicle for foreign capital to enter the country.
“I’ve been surprised by how easy it has been to raise the capital,” Cisneros said during a press conference in April at the Caracas Stock Exchange.
“It’s a very interesting mix, with many American and Latin American family offices, some institutional investors and sovereign wealth funds.”
Source:
www.ft.com
