The U.S. Treasury Department on Tuesday issued a general license authorizing the provision of U.S. goods, technology, software or services for the exploration, development or production of oil and gas in Venezuela, a long-awaited permit that could help increase output in the country.
Washington has been relaxing sanctions on Venezuela’s energy industry, first imposed in 2019, since U.S. forces captured President Nicolas Maduro in early January. That led to the government of interim President Delcy Rodriguez, which shortly after agreed to a flagship $2 billion oil supply deal with Washington. Oil drillers need U.S. authorization to use specialized equipment in Venezuela and to import rigs required to expand the country’s oil output, currently at almost 1 million barrels per day (bpd).
The license mandates that any contract for the authorized transactions to be signed with Venezuela’s government or state energy company PDVSA must follow U.S. laws, with disputes to be resolved in the United States. Payments to any sanctioned entity must be made into a U.S.-overseen fund, it adds.
The license also says it does not authorize “the formation of new joint ventures or other entities in Venezuela to explore or produce oil or gas.”
Transactions to maintain oil or gas operations, including equipment repairs for exploration or production were authorized.
U.S. officials have drafted an ambitious $100 billion reconstruction plan for the country’s oil industry, expected to allow the expansion of foreign producers and see the entrance of new participants, including oil service providers.
Washington previously granted several general licenses to facilitate oil exports, storage, imports and sales from Venezuela.
Many partners and customers of PDVSA, including producers Chevron, Repsol and ENI, and refiner Reliance Industries, have also applied for individual licenses to expand output or exports.
The large number of individual requests to the U.S. government had delayed progress on plans to expand exports and get investment moving quickly into the country, sources have said.
(Reporting by Marianna Parraga; Editing by Nathan Crooks and Lincoln Feast.)