A new license granting U.S. oil companies expanded access to operate in Venezuela was issued Thursday by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).
OFAC’s new license comes at a time when the Venezuelan socialist regime’s lawmakers approved a sweeping reform package to the nation’s notoriously strict hydrocarbons law, ending decades’ worth of socialist restrictions on the nation’s oil industry.
The license authorizes U.S. companies to engage in a variety of 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 linked to Russia, China, Iran, Cuba, and North Korea.
The license’s terms stipulate that any person who engages in the authorized activities with Venezuelan-origin oil to countries other than the United States under the terms of the license must provide detailed, recurrent reports to both the State and Energy Departments on the transactions.
An unnamed White House official told Reuters that the new license “would help flow existing product” in Venezuela, with more announcements on the easing on sanctions “soon.”
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The United States took control of Venezuelan oil exports earlier this month following the January 3 U.S. law enforcement operation in Caracas that led to the captured of socialist dictator Nicolás Maduro and his wife Cilia Flores. Shortly afterwards, President Trump explained that the Venezuelan socialist regime, now led by “acting president” Delcy Rodríguez, would begin cooperating with the United States to help boost its oil output and sell its oil in U.S. markets, in addition to allowing U.S. oil companies operate in Venezuela.
Lat week, President Donald Trump told reporters aboard Air Force One that U.S. companies will start drilling Venezuelan oil “very soon.”
The U.S. control on Venezuelan oil has reportedly deterred China’s state-owned oil company PetroChina from trading with Venezuelan oil — which, for years, it bought under heavily discounted prices. The Trump administration has reportedly expressed that it would be allowing China to purchase Venezuelan oil but at regular international prices and not the “unfair, undercut” rates that it had been buying it at prior to Maduro’s capture.
The new OFAC license was issued right as Venezuela’s socialist-controlled National Assembly unanimously approved a sweeping reform package to the country’s oil law granting access to private companies to the Venezuelan oil sector, the recognition of international arbitration in investment disputes, and reduction and simplification of taxes, among other changes. The socialist lawmakers expediently approved the legislation in the days following Maduro’s downfall.
“It has been 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 Law on Hydrocarbons, oil production in Venezuela will skyrocket,” Jorge Rodríguez, the head of the National Assembly — and Delcy’s brother — wrote on social media.
Delcy Rodríguez celebrated the new oil reforms in Venezuela during a Thursday night regime event, and proclaimed, “No transnational hydrocarbons sector should feel left out.”
“We welcome foreign investment and national investment for productive development in the oil, gas, and petrochemical sectors,” she said.
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