Washington plans to issue restricted licenses to companies with existing operations in Venezuela to boost oil production amid sanctions.
Washington is preparing to issue restricted licenses to certain companies with existing operations in Venezuela. This move comes after the reimplementation of sanctions against the South American nation. The licenses are expected to be granted to a select group of companies including Chevron, Spain’s Repsol, Italian Eni, French Maurel & Prom, and Shell, which all currently have oil production activities in Venezuela.
Priority will be given to those firms already involved in the Venezuelan oil sector. However, companies like India’s Reliance Industries, which does not have existing assets in Venezuela, are unlikely to receive the sought-after approvals from the U.S.
The strategy behind this decision appears to be an attempt by Washington to incentivize the companies to restart and possibly expand their operations in Venezuela. This comes despite the recent reimposition of sanctions due to Venezuelan President Nicholas Maduro's failure to meet the conditions for free and fair elections, as well as his efforts to suppress the opposition.
A direct quote or statement from the sources was not provided in the original report. However, it was mentioned that the new arrangement would also set a limit on the revenue that the Venezuelan government can collect from oil production.
On the regulatory front, the U.S. Treasury Department extended a general license through November 15, allowing certain transactions with the Venezuelan state oil company PDVSA that are necessary for winding down operations. This extension affects key industry players such as Halliburton, Schlumberger, Baker Hughes Holdings, and Weatherford International PLC.
In November of the previous year, Venezuela’s Oil Ministry reported that the country's crude output reached 850,000 barrels per day, marking an increase from the 786,000 barrels per day in October.
In a move to bypass U.S. restrictions and avoid having its oil sale revenues frozen in foreign bank accounts, PDVSA has accelerated its plan to use the stablecoin Tether, which is pegged to the U.S. dollar, for its oil export transactions.
