The U.S. Department of the Treasury on Tuesday (February 10) issued a General License, formally authorizing exploration, development, and production activities of oil and natural gas in Venezuela. This move is seen as an important step to boost the country’s oil production capacity.
According to the license, U.S. citizens can engage in oil and gas-related transactions with the Venezuelan government within specific parameters, including providing goods, technology, software, and services for exploration operations, new oil and gas field development, and production. The license also covers supporting businesses such as shipping, logistics, vessel leasing, insurance, and maintenance.
It is widely believed that this action will inject new vitality into the state-owned oil company PDVSA (Petróleos de Venezuela, S.A.). In January of this year, Washington imposed strict sanctions on Venezuela to pressure dictator Nicolás Maduro, leading to significant production cuts by PDVSA and millions of barrels of crude oil stranded onshore.
Prior to this, the U.S. government partially lifted sanctions at the end of January, allowing commodity traders Vitol and Trafigura, along with Chevron, to export Venezuelan crude oil. This arrangement took effect last month and helped PDVSA clear some of its backlog of crude oil.
However, the new license issued by the U.S. Treasury Department still comes with stringent restrictions. The document explicitly prohibits the initiation of any new oil and gas projects or investments in Venezuela, as well as transactions with Russia, Iran, North Korea, Cuba, and China. The license also does not include payments in digital currency or gold, nor does it involve unfreezing previously frozen assets.
Furthermore, the license document clearly states that the authorization does not allow for “the establishment of new joint ventures or other entities in Venezuela to engage in oil or natural gas exploration and production.”
President Trump announced in January that U.S. oil and gas companies plan to invest around $100 billion in Venezuela to revitalize the local oil industry after Maduro’s capture. Trump stated that after extensive rebuilding, Venezuela’s aging oil and gas sector is expected to revive and send millions of barrels of crude oil to the U.S., thereby boosting the economies of both countries.
The White House has held discussions with multiple energy companies regarding the related plans, including Chevron, ExxonMobil, ConocoPhillips, Halliburton, Shell, Vitol, Trafigura, Valero, Marathon, Repsol of Spain, Eni of Italy, and others.
Public data shows that the oil industry has long dominated Venezuela’s mixed economy, accounting for approximately 80% of the country’s export earnings.