The United States lifts sanctions on Venezuelan oil

WashingtonThe United States lifted sanctions on Venezuelan oil on Friday, shortly after a meeting between U.S. Energy Secretary Chris Wright and Venezuela's interim president, Delcy Rodríguez. The measure was published on the U.S. Treasury Department's website, "authorizing negotiations and the signing of conditional contracts for certain investments in Venezuela." The Treasury's Office of Foreign Assets Control (OFAC) also issued a list of companies with operations in the country that can resume their activities, including the Spanish company Repsol. It's worth noting that the U.S. sanctions on Venezuelan oil meant Repsol would not receive payment for its gas production in the country.

The other companies that are included in the list The Treasury's sanctions include the US-based Chevron, as well as Shell, Eni, and BP. Besides allowing the resumption of operations, OFAC is also permitting other companies worldwide to make new investments in Venezuelan oil and gas. Sanctions remain in place only for dealings with Russian, Iranian, and Chinese companies.

The move to lift the sanctions comes a month after the meeting that Donald Trump held at the White House with the major oil companies, which showed reluctance to operate within Venezuela due to the lack of legal and economic guarantees. The US president demanded that companies make a "minimum" investment of $100 billion to begin rebuilding the necessary capacity and infrastructure in Venezuela. It costs approximately $20 to $30 billion to build an oil processing plant. In the case of Venezuela, the cost could be even higher considering the scarcity of infrastructure and the damage to much of what exists.

While some giants like Exxon were opposed to venturing into the company—Exxon's CEO said that "it is not investable today"—others like the Spanish company Repsol, which already had existing infrastructure and had continued operating under the Chavista regime, showed interest in Venezuelan crude. “We are in Venezuela, Mr. President, with our partners at Eni. We produce the gas that guarantees the stability of half of Venezuela’s clean electricity generation,” stated the company’s CEO, Josu Jon Imaz, during the meeting. “We are committed to this stability. And we are also on the ground: we have personnel, we have facilities, we have technical capabilities,” he emphasized. This week, Imaz again referred to Trump’s plan for oil companies in Venezuela. “It is important for Repsol, but above all for the country [Venezuela],” the executive reflected at a forum organized by the IESE Business School and Deloitte in Madrid. The CEO reiterated Repsol’s “commitment” to continue working to help the Latin American country produce more oil. The Spanish company is one of the major oil companies in Venezuela—not counting Russian or Chinese companies, after Cheveron, Repsol is the second largest producer—and has therefore asserted that it should be taken into account. "Those of us on the ground with the assets and resources must be able to invest so that production increases," he argued. "Venezuela needs economic and social stability," insisted the executive, who claimed that in recent weeks "the doubts [about the country's future] had dissipated."

It has not gone unnoticed that the movement also follows the visit of Colombian President Gustavo Petro to Washington last week. The face-to-face meeting with Trump, which was expected to be explosive, It turned out to be a calm sea full of sympathy and giftsThe positive atmosphere of the closed-door meeting between the two leaders was explained later, when the former anti-imperialist guerrilla fighter appeared at a press conference to explain that he had extended an olive branch to Washington to extract Venezuelan oil. Petro presented it as a plan to help reactivate Venezuela's economy, where Colombia—which shares a border—could act as the gateway for the crude oil extracted by the companies. "We have seen how Venezuela could be reactivated with Colombia's help," Petro stated, also hinting at the participation of the Colombian state oil company Ecopetrol, but declining to provide details. Petro asserted that he had already had energy-related contacts with Venezuela in the preceding months and that, after the capture of Nicolás Maduro, "the United States saw an immediate opportunity to lift sanctions on the West [the border region between Colombia and Venezuela] and open the possibility for Ecopetrol to participate." The Colombian president drew an analogy with the work plumbers do to repair pipes when explaining the future restoration of the gas pipelines, oil pipelines, and electrical connections already built in the border area.

"It's not a question of how Ecopetrol enters Venezuela; that's a later issue. [...] What it's about is how the border is structured, which is connecting pipes. It's like at your house with the plumber; the pipes are closed, and the three [units/companies] in our country either have [something] for [someone] or [someone] refines [something]. [The countries] are Venezuela, Colombia, and [someone] and where these types of goods are sold. And in that regard, let's say that the proposals from the United States are on the table," explained Petro, who assured that the proposals have been on the table for years with both the Colombian company Ecopetrol and the Venezuelan companies.