U.S. Issues License for Oil Companies to Operate in Venezuela
A new license granting U.S. oil companies expanded access to operate in Venezuela was issued Thursday by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
OFAC’s new license comes at a time when lawmakers in Venezuela’s socialist regime approved a sweeping program of reforms to the nation’s notoriously strict hydrocarbon law, ending decades of socialist restrictions on the country’s oil industry.
The license allows U.S. companies to engage in various activities involving Venezuelan oil, such as buying, selling, transporting or refining it, but it does not lift existing U.S. oil sanctions on production, nor does it authorize transactions related to Russia, China, Iran, Cuba and North Korea.
The terms of the license state that any person who engages in permitted activities with oil of Venezuelan origin to countries other than the United States under the terms of the license must provide detailed and recurring reports on transactions to the Department of State and the Department of Energy.
An unnamed White House official told Reuters the new license would “help get existing products” to Venezuela, with further announcements on sanctions easing “soon.”
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The United States took control of Venezuelan oil exports earlier this month following the Jan. 3 U.S. law enforcement operation in Caracas that led to the capture of socialist dictator Nicolás Maduro and his wife Cilia Flores. Shortly after, President Trump explained that the Venezuelan socialist regime, now led by “interim president” Delcy Rodríguez, would begin cooperating with the United States to help it increase its oil production and sell its oil in American markets, in addition to allowing American oil companies to operate in Venezuela.
Last week, President Donald Trump told reporters aboard Air Force One that U.S. companies would begin drilling for Venezuelan oil “very soon.”
U.S. control over Venezuelan oil has reportedly dissuaded China’s state-owned oil company PetroChina from trading with Venezuelan oil – which it bought for years at deeply discounted prices. The Trump administration reportedly said it would allow China to buy Venezuelan oil, but at regular international prices and not the “unfair and undercut” rates it was buying it at before Maduro’s capture.
OFAC’s new license was issued as Venezuela’s socialist-controlled National Assembly unanimously approved a broad program of reforms to the country’s oil law granting private companies access to Venezuela’s oil sector, recognition of international arbitration in investment disputes, and the reduction and simplification of taxes, among other changes. Socialist lawmakers quickly approved the legislation in the days after Maduro’s fall.
“This is a historic day for our people, for the Venezuelan oil industry and for the thousands of workers in this sector. With the reform of the Organic Hydrocarbons Law, oil production in Venezuela will skyrocket,” said Jorge Rodríguez, president of the National Assembly and brother of Delcy. wrote on social networks.
Delcy Rodríguez celebrated Venezuela’s new oil reforms at a regime event Thursday evening and proclaimed: “No transnational hydrocarbon sector should feel excluded.”
“We welcome foreign and domestic investments for productive development in the oil, gas and petrochemical sectors,” she said.
