Fred Ehrsam’s move into Venezuelan oil is becoming a test of what happens to incumbent investors when a government opens an industry by rewriting who gets to operate existing assets.
The Coinbase co-founder is seeking control of at least three oil fields in Venezuela’s Orinoco Belt, Bloomberg reported, citing people familiar with negotiations that have not been made public. The Boca, Guico, and Guara blocks are already operated by Alvorada Heavy Industries, whose contracts are under consideration for revocation by US officials, according to the report.
The reported pursuit comes as Ehrsam’s Venezuela strategy appears to be moving beyond the exploratory stage disclosed earlier this year. Reuters reported Wednesday that Primavera, a company he co-founded to invest in Venezuela, is among companies expected to sign new energy agreements with Venezuela alongside Chevron, Eni, and KEO Capital. The agreements have been negotiated with Venezuela’s oil ministry and state-owned PDVSA as dozens of energy contracts migrate to new terms following an oil-sector reform approved in January.
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Bloomberg first reported in May that Ehrsam had repeatedly traveled to Caracas and met Venezuelan and US officials while exploring opportunities in oil, gas, fintech, and digital payments.
The recent reports now establish two different developments. Primavera is positioned for a formal energy agreement, according to Reuters sources, while Ehrsam is separately pursuing operating control over Alvorada’s fields, according to Bloomberg sources.
The potential reassignment carries a different financial consequence from simply awarding undeveloped acreage. Alvorada entered the fields around 2023 and spent about $30 million restarting idle wells, according to a person cited by Bloomberg.
The company was more recently working to comply with Venezuela’s revised hydrocarbons framework and increase production. In July, it acquired Texas producer Calistoga Energy Reserves to establish a US base for its Venezuela operations, Bloomberg reported.
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One Bloomberg source said Alvorada is now trying to engage US officials to preserve its investments.
The contract review is occurring alongside a much larger redistribution of Venezuelan energy rights. The White House said August 31 that Venezuela’s interim authorities had granted North American Blue Energy Partners 100-year concessions covering 17 oil fields with approximately 65 billion barrels of proven reserves.
The agreement gives the US government economic and governance rights in the venture, including a 35% equity position and preferential access to production.
Separately, Chevron said Wednesday that it plans to invest more than $7 billion through its Venezuelan joint ventures and more than double production to approximately 600,000 barrels per day over five years. Its Petroindependencia venture is gaining two additional areas in the Orinoco Belt.
Energy Secretary Chris Wright, currently in Caracas, said Venezuela is producing roughly 1.1 million to 1.2 million barrels per day and that new investment could more than double national output over the next several years.
Ehrsam, meanwhile, remains a Coinbase director after shareholders reelected him in June, although there is no indication Coinbase is involved in Primavera or the Venezuelan oil negotiations.
Primavera’s expected energy agreement would establish Ehrsam as a participant in Venezuela’s reopening. Whether that participation extends to the three Alvorada-operated fields still depends on contracts that have neither been publicly revoked nor reassigned.
