Published on November 17, 2023, 5:22 am

United States Allows Certain Transactions For Pdvsa Asset Maintenance Amidst Venezuela Sanctions

In a notable change of direction, the United States has given permission for certain transactions concerning the asset maintenance of PDVSA, Venezuela’s state-run oil and natural gas company. This authorization, issued by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), holds significance amidst the sanctions imposed on Venezuela’s oil sector, which were intended to put pressure on President Nicolas Maduro’s government.

This move can be seen as a slight alleviation of the economic pressures faced by Venezuela. However, it is important to note that the broader sanctions regime remains firmly in place. The authorization allows for some activities that were previously restricted due to the sanctions, highlighting the delicate balance between punitive measures and practical considerations such as preserving assets in international relations and economic sanctions.

Following this authorization, Chevron (NYSE: CVX) has begun delivering fuel to PDVSA, according to Reuters. The company is said to be supplying PDVSA with various fuels, including naphtha and gasoline blend stock. The first shipment under this arrangement arrived at Venezuela’s Jose port recently, carrying 450k barrels of heavy naphtha for PDVSA. Another tanker is being chartered to transport 240k barrels of gasoline blend stock for delivery in November.

The newly granted license enables payments to be made and received from Venezuela and allows for the procurement of goods and services for oil and gas projects. A special license has been issued by the U.S. Treasury Department specifically for PDVSA to conduct transactions related to essential operations maintenance or the closure of specific entities. These transactions are expected to influence “the security or preservation of assets in Venezuela” involving PDVSA or any entity where PDVSA has a majority shareholding. However, it’s important to note that activities such as drilling, lifting, processing, buying, selling, transporting, or shipping any Venezuelan oil or petroleum products are explicitly excluded from this authorization.

As global discussions on the political situation and oil industry in Venezuela continue to focus on the U.S. stance, this authorization represents a significant event in diplomatic and economic circles. The unfolding consequences of this decision will be closely watched in the coming days.

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