The US government plans to acquire a 35% passive stake in Venezuelan businessman Alejandro Betancourt’s North American Blue Energy Partners, the Wall Street Journal (WSJ) reported, citing people involved in negotiations.

Under the proposed arrangement, Washington would also secure preferential rights to purchase 20% of the company’s oil production at cost, according to the report.

The Pentagon’s Office of Strategic Capital (OSC) is expected to structure the investment through penny warrants, which would provide the US with an equity interest in the company without requiring a significant upfront capital investment, the WSJ reported.

The development comes a day after US President Donald Trump said Washington would take control of 20% of Venezuela’s vast oil reserves.

Trump provided limited details on the arrangement, saying that the US had secured majority control of more than 65 billion barrels of Venezuela’s proven oil reserves through a partnership with private companies.

The Pentagon, however, disputed the characterization of the OSC’s role. In response to a Reuters request for comment, the department said the office does not take equity stakes in private companies and is limited by law to providing capital assistance through loans, loan guarantees, or technical assistance, including structuring transactions for investment development and financing.

The White House and North American Blue Energy Partners had not responded to requests for comment outside regular business hours.

The proposed investment comes as Washington seeks to deepen its involvement in Venezuela’s oil sector, home to the world’s largest proven crude oil reserves.