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CERAWEEK-US plans no wider easing of sanctions on Venezuela, official says

Published 2023-03-07, 02:13 p/m
© Reuters. FILE PHOTO: A crowd gathers ahead of a speech of United Arab Emirates Minister of Industry and Advanced Technology Sultan Al Jaber during the CERAWeek energy conference 2023 in Houston, Texas, U.S. March 6, 2023.  REUTERS/Callaghan O'Hare/File Photo
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By Marianna Parraga

HOUSTON (Reuters) - The U.S. government is not planning a systematic easing of sanctions on Venezuela after an initial round allowed partners of state-run oil firm PDVSA to resume taking oil for past debts, a State Department official said.

In November, Washington issued a six-month license allowing Chevron Corp (NYSE:CVX) to expand operations and export Venezuelan oil to the United States. Eni and Repsol (BME:REP) also began taking Venezuelan crude for debt with U.S. approvals, This year, Trinidad and Tobago received a U.S. nod to jointly development an offshore natural gas field with Venezuela.

Those moves by U.S. President Joe Biden's administration contrasted with former President Donald Trump's "maximum pressure" policy of restrictions designed to oust Venezuelan President Nicolas Maduro.

But the State Department licenses do not indicate a general turn in policy towards Venezuela, Under Secretary for Economic Growth, Energy and the Environment Jose Fernandez told Reuters in an interview at the CERAWeek energy conference in Houston.

"There have been limited changes in specific sanctions and we can take them back in any moment," Fernandez said. The Chevron license came after Maduro's administration resumed political talks with the opposition in Mexico last year, while the Trinidad authorization was requested by Caribbean countries to secure future energy supplies.

"I can categorically say that we don't have any plans to liberalize further on Venezuela," said Fernandez, stressing: "In this moment, there are no plans to ease the sanctions more."

Chevron received and shipped about 86,000 barrels per day (bpd) of Venezuelan crude last month after resuming exports to the United States following a four-year hiatus.

The Chevron, Eni and Repsol cargoes have not represented an increase in Venezuela's overall oil exports. The country will require massive new investment following years of conflict with international oil companies, an exodus of qualified staff, and U.S. sanctions.

Venezuela's exports last year were 716,000 bpd, up slightly from the previous year, according to data supplied to OPEC. They remain a fraction of the 2.8 million bpd the nation was producing a decade ago.

Analysts and oil executives at CERAWeek said they do not expect a sizeable increase in Venezuela's oil exports that could stabilize oil markets disrupted after Russia's invasion of Ukraine.

© Reuters. FILE PHOTO: A crowd gathers ahead of a speech of United Arab Emirates Minister of Industry and Advanced Technology Sultan Al Jaber during the CERAWeek energy conference 2023 in Houston, Texas, U.S. March 6, 2023.  REUTERS/Callaghan O'Hare/File Photo

Fifteen years ago, "There was a good number of international investors in Venezuela. Production was over 3 million bpd... Now look at Venezuela," said Alistair Routledge, Exxon Mobil (NYSE:XOM)'s country manager for Guyana.

"It's essential that governments understand that we are investing in a horizons of 20-30 years, so we need stability and regulations that are supportive," he said.

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