US softens restrictions for oil companies in Venezuela, including Repsol

Washington (EFE).- The United States Treasury Department announced on Friday two new licenses that reduce restrictions for foreign oil companies operating in Venezuela and also grant permits to five specific companies, including Repsol of Spain, but only under strict control and reporting conditions.

These licenses do not eliminate the US sanctions framework, tightened in 2019, and continue to have an impact on Venezuela. However, they facilitate the extraction of crude oil in Venezuela for non-Venezuelan companies and allow those that already operate there, such as Repsol, to increase their capital investments and production considerably.

Friday’s announcement is part of the plan Washington agreed upon with Venezuela’s acting president, Delcy Rodríguez, to reopen the local oil market following the capture of former Venezuelan President Nicolás Maduro by US troops on Jan. 3.

The first license announced Friday by the Office of Foreign Assets Control (OFAC) authorizes five major companies, Chevron, BP, Eni, Shell, and Repsol, to engage in transactions related to hydrocarbon operations with Petróleos de Venezuela or any other Venezuelan public entity.

The permit requires that all contracts be subject to US jurisdiction and stipulates that all payments to individuals «blocked» by OFAC (which maintains sanctions on Venezuelan individuals and entities) must be made to accounts designated by the US Department of the Treasury.

The second order, also issued on Friday, authorizes the negotiation and signing of contracts for future investments, which will depend on the future granting or denial of specific OFAC licenses.

This license specifically prohibits transactions involving individuals or entities linked to Russia, Iran, North Korea, Cuba, or China, as well as vessels sanctioned by Washington.

The two documents announced on Friday came three days after the Treasury Department issued two other licenses to oil companies operating in the US that want to do business in Venezuela.

The licenses issued on Friday will enable companies like Repsol and Eni, which have substantial gas operations and minimal crude oil production through joint ventures with PDVSA and other state-owned enterprises, to pursue large-scale oil production.

In January, less than a week after Nicolás Maduro was ousted, Repsol CEO Josu Jon Imaz said at the White House that the company was prepared to «invest heavily in Venezuela» and triple its crude oil production in the Caribbean country to approximately 135,000 barrels per day. EFE

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