Washington D.C. – The United States government on , significantly eased sanctions on Venezuela’s energy sector, issuing two general licenses that pave the way for major international oil companies to resume operations and for new investment contracts. The move follows the recent removal of President Nicolás Maduro from power and signals a substantial shift in U.S. Policy towards the oil-rich nation.
The licenses authorize companies including Chevron, BP, Eni, Repsol, and Shell to restart oil and gas operations in Venezuela, and allow other companies worldwide to negotiate new energy investment contracts. However, transactions with entities from Russia, Iran, or China are explicitly prohibited, as are joint ventures involving those countries.
This represents the most substantial relaxation of U.S. Sanctions on Venezuela since , when restrictions were first imposed under the Trump administration. The stated aim is to facilitate increased energy investment and production in Venezuela, which has faced a severe economic crisis exacerbated by years of political instability and sanctions.
The Treasury Department’s Office of Foreign Assets Control (OFAC) issued the licenses, which allow the named oil majors to resume operations in partnership with Venezuela’s state-owned oil company, Petróleos de Venezuela (PDVSA). Companies seeking to enter into new contracts with PDVSA will require express approval from OFAC.
The move comes after negotiations between the new Venezuelan government, led by President Delcy Rodríguez, and U.S. Officials, particularly Secretary of State Marco Rubio. Former President Donald Trump described relations with Venezuela as “as good as one could desire,” and praised Rodríguez’s work, even hinting at a potential visit to Caracas, though no firm date has been set.
Venezuela recently approved a new hydrocarbons law designed to reform limitations on foreign investment, addressing longstanding concerns over unfulfilled contracts, international legal disputes, and restrictions on multinational corporations. Chevron had been the only U.S. Company continuing to extract Venezuelan crude, albeit with difficulties, operating under specific licenses from the U.S. Government for contracts with PDVSA.
The new licenses build upon other recent authorizations allowing the purchase and installation of equipment in Venezuela, negotiations with ports and airports, and other measures intended to encourage investment in the country’s struggling oil industry. The U.S. Department of State stated that the licenses are intended to “invite U.S. And like-minded companies to play a constructive role in supporting Venezuela’s economic recovery.”
While the move has been welcomed by some in the energy sector, skepticism remains regarding the state of Venezuela’s oil infrastructure and the overall political and economic outlook. Darren Woods, the head of ExxonMobil, reportedly expressed concerns that significant investment would be required before any returns could be realized.
The licenses issued by the Treasury Department share common characteristics: they open the door to investment and allow transactions with PDVSA and its subsidiaries, provided companies agree to resolve any disputes through the U.S. Legal system, rather than Venezuelan courts.
all revenues generated from these transactions will be deposited into accounts held by the U.S. Treasury Department in Qatar. This arrangement is described as provisional by U.S. Officials, and is intended to address concerns that funds deposited into U.S. Banks could be subject to legal challenges stemming from ongoing litigation between Caracas and numerous international companies.
This financial arrangement has drawn criticism from the Democratic opposition in the U.S., which has proposed legislation calling for an audit of these funds and their ultimate destination within Venezuela.
The U.S. Licenses specifically prohibit transactions with individuals or entities linked to Russia, Iran, North Korea, Cuba, and China. This restriction underscores the U.S.’s broader geopolitical strategy and its desire to limit the influence of these countries in the region.
Venezuela holds the world’s largest proven oil reserves. In , production reached 1.2 million barrels per day, a significant increase from the 300,000 barrels extracted in , but still below the 3 million barrels per day peak reached in the early 2000s.
The easing of sanctions represents a significant gamble by the U.S. Government, betting that increased energy investment will stabilize Venezuela’s economy and contribute to a more democratic future. The success of this strategy will depend on a number of factors, including the willingness of international oil companies to invest, the ability of the Venezuelan government to create a stable and transparent investment climate, and the broader geopolitical context in the region.
