The Relentless Crypto Billionaire Who Moved to Venezuela in Pursuit of Oil

Cryptocurrency billionaire Fred Ehrsam spent months living in a luxury hotel in Caracas, building a rolodex of connections in a long-shot bid to become one of Venezuela’s biggest oil producers.

Coinbase co-founder Fred Ehrsam, in 2014. TAMMY PEREZ/GETTY IMAGESWithout a track record in oil and gas, the 38-year-old co-founder of crypto exchange Coinbase Global has emerged as a surprise contender in President Trump’s push to revitalize Venezuela’s run-down oil industry. Primavera, the company Ehrsam co-founded earlier this year, signed production-sharing contracts last week with state-run oil giant Petróleos de Venezuela to secure his foothold there.

Like many answering Trump’s call to invest in Venezuela, Ehrsam isn’t a household name in the oil patch. Rather, he has supported Trump and has some measure of political cachet of his own. He serves on the president’s Council of Advisors on Science and Technology, alongside Mark Zuckerberg and Larry Ellison, among others.

Some Venezuela experts said they had never heard of Primavera and suggested it faces an uphill battle in its bid to expand in the country.

“Oil contracts are never given to startups with no experience,” said Francisco Monaldi, director of the Latin America energy program at the Baker Institute at Rice University. “You need a proven record.”

Trump has pressed the likes of ExxonMobil, ConocoPhillips and oil billionaire Harold Hamm’s Continental Resources to pour $100 billion into revitalizing the country’s oil fields. Yet eight months after the U.S. ousted strongman Nicolás Maduro in early January, those companies remain on the sidelines, at least for now, and Primavera is one of the few U.S. companies on board.

Chevron, which has operated in the country for decades, announced a plan last week to pump $7 billion into Venezuela’s oil fields over the next five years, a win for Trump after months of negotiations.

Primavera, which means “spring” in Spanish, was established as a special-purpose entity meant to facilitate investments in Venezuela. The idea for investing there, during the political transition, emerged in conversations between Ehrsam and Primavera co-founder Manuel Iribarren, a Venezuelan native who attended Stanford University, according to a person familiar with the company’s efforts.

Both men were in Venezuela by February, looking for investment opportunities that would ultimately improve the country’s economy and U.S. national security. Following discussions with Venezuelan leaders and PdVSA executives, they decided their capital would be best deployed in the oil-and-gas industry, even though such investments are often considered high risk, the person said. Primavera’s U.S. base is in Texas.

Despite his lack of experience in the energy industry, Ehrsam isn’t one to steer away from ambitious ideas. He chalked up his success in crypto to being among “radical believers on the inside” compared with “many people on the outside who might still be touching the elephant, still trying to figure out exactly what’s going on here” in a 2021 Bloomberg interview.

Earlier this year, Ehrsam moved into the opulent Cayena Caracas, a 47-room boutique hotel in an upscale neighborhood of Venezuela’s capital. He cultivated relationships with government officials, met with executives across a range of sectors and assembled teams of lawyers, advisers and others who could help him build a position in Venezuela’s oil patch, according to people familiar with his efforts.

Among those he has brought on board as a co-founder at Primavera is oil-industry veteran Dheeraj Verma, a former president at private-equity firm Quantum Energy Partners. Verma, who stepped down from that role at Quantum in 2022, helped lead that firm’s investment strategy as it snapped up stakes in the U.S. shale boom. He also serves on the board of Canadian pipeline operator TC Energy.

Despite encountering skepticism from some Venezuelan and U.S. officials, Ehrsam was smart and relentless in his pursuit and expressed greater ambitions and more serious intent than others, some of the people said.

He and Iribarren sometimes invoked their discussions with the Trump administration, though they didn’t suggest the White House had endorsed their efforts, people familiar with the matter added. Ehrsam met with Interior Secretary Doug Burgum when they were both in Venezuela a few months after Maduro’s ouster.

Ehrsam sought access to Venezuela’s large heavy oil fields in the Boca, Guico and Guara blocks in the Orinoco Belt. Thus far, Primavera has signed production-sharing contracts for other less sought-after but potentially lucrative fields in the Budare oil block, a region with lighter crude oil. Primavera’s progress there could lead to further agreements elsewhere, the people said.

Ehrsam wasn’t present last week at the Miraflores Palace in Caracas when Energy Secretary Chris Wright and interim President Delcy Rodríguez unveiled a series of U.S. investment deals. But Iribarren told Rodríguez that the company aims to “bring clean, reliable and low-cost energy” to the country.

Primavera is working to “use all the knowledge of the Venezuelan people and to develop our workers, and to use local industry, but also to bring back all the talented Venezuelans who are part of the diaspora,” Iribarren said. Thousands of oil-industry workers left Venezuela during Hugo Chávez’s rule.

Ehrsam has one thing Venezuela’s oil sector is in need of: fresh capital. He co-founded Coinbase in 2012 after leaving Goldman Sachs, where he worked as a foreign-exchange trader. He later formed crypto investment firm Paradigm in 2018.

His net worth came to about $2.4 billion this year, according to Forbes, stemming largely from a 2% stake in Coinbase and other cryptocurrency holdings.

In Venezuela, cryptocurrency has become ubiquitous after the value of the bolivar plunged during a stint of hyperinflation. Maduro launched a state-backed coin called the Petro in 2018 that failed to gain traction, but other tokens have thrived there. Ehrsam’s expertise in the sector could lend itself to opportunities in Venezuela’s ecosystem of digital payments, some of the people familiar with his efforts said.

The billionaire has said little publicly about his political views, but he has built relationships with the Trump administration and donated $1 million to the Trump-Vance Inaugural Committee, according to federal fundraising records.

Primavera isn’t the only small wildcatter with ties to the president that has committed to investing in Venezuela’s oil patch.

Last month, Dallas-based Hunt Oil agreed to develop two fields; the Hunt family is a well-known supporter of Trump and the Republican Party.

Denver-based Aspect Holdings, a private energy investment and exploration company, signed a contract last week to conduct a technical study in conjunction with PdVSA. Founded by billionaire Alex Cranberg, Aspect is investing initially in technical surveys and seismic processing, and is working toward eventually signing an exploration investment contract to discover new fields. Aspect also donated $1 million to the Trump-Vance Inaugural Committee.

Sable Offshore, led by oil veteran Jim Flores, is vying to enter Venezuela as well. Despite opposition from California regulators, Sable won federal approval to pump oil off the coast of Santa Barbara via an executive order signed by the president. Last month, policy adviser Brittany Kelm joined the company from Trump’s National Energy Dominance Council.

The deals with smaller players have surprised oil-industry veterans who question whether they have the financial prowess or expertise to succeed in Venezuela, particularly in its heavy oil fields where viscous crude is difficult to move.

Pedro Burelli, a Venezuelan opposition figure and former director of the country’s state-owned oil company, said the oil fields should be assigned to companies with the financial wherewithal and experience to handle complex oil projects. Many of the ventures will have to rely on equity investors since banks, he said, are likely to be reluctant to provide funding, given the country’s massive debt load.

“The disorganized land grab that’s going on is not going to help anybody,” Burelli said.

Write to Collin Eaton at collin.eaton@wsj.com and Benoît Morenne at benoit.morenne@wsj.com