(Oil Price) – The Trump Administration has further eased the sanctions on Venezuela’s oil industry by allowing U.S. firms to provide services and technology for hydrocarbon exploration and production in the South American country.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) noted in a new general license that U.S. entities or persons are now authorized to provide “goods, technology, software, or services for the exploration, development, or production of oil or gas in Venezuela” under certain limited conditions.
Since the capture of Nicolas Maduro in early January, the U.S. Administration has taken control of Venezuelan oil sales, which are being handled by top traders Vitol and Trafigura, and has started to ease some of the restrictions on the domestic industry.
U.S. President Donald Trump has touted Venezuela’s oil as a creator of “tremendous wealth” for industry and “great wealth” for the American people.
This license essentially allows oilfield services giants such as Halliburton and SLB to work in Venezuela.
Halliburton and SLB are expected to return to Venezuela operations.
Halliburton CEO Jeff Miller told analysts on the Q4 earnings call that he is “confident that we could move fairly quickly in Venezuela.”
“We’re working through the mechanics around license and things that we’re certain will get in place,” Miller said last month.
SLB’s chief executive, Olivier Le Peuch, said on the earnings call at the end of January that the oilfield services giant remains “confident that with appropriate licensing, safety parameters, and compliance measures in place, we can rapidly ramp up activities in support of the oil and gas industry in Venezuela.”
“We are excited and we are already receiving a lot of inquiries from our customers,” Le Peuch added.
While this week’s general license authorizes the provision of certain services and technology, with prior approval of the U.S. Administration, it does not include any transaction involving Russian, Iranian, Chinese, Cuban, or North Korean entities. The license does not authorize “the formation of new joint ventures or other entities in Venezuela to explore or produce oil or gas,” either.
Currently, Chevron is the only U.S. company producing oil and authorized to export the oil from Venezuela.
By Tsvetana Paraskova for Oilprice.com
