Authors: Arasi Somaseca and Mariana Paraga
HOUSTON (Reuters) – Venezuela’s state oil company PDVSA has refused to sell oil to companies without a separate U.S. license over the past two weeks, limiting exports and preventing the country from depleting full storage tanks more quickly, four company sources seeking to buy cargos told Reuters.
Washington last month granted general licenses broadly allowing oil exports and issued individual licenses to traders Trafigura and Vitol to export billions of dollars’ worth of oil. Last year, the United States issued a restrictive license to Chevron allowing it to export Venezuelan crude oil to the United States.
Venezuela relies on oil export revenue and needs sales revenue to run the government. The general license is intended to shield the company from U.S. sanctions on Venezuela’s oil industry, which Washington has eased since its capture of Venezuelan President Nicolás Maduro last month.
However, buyers of Venezuelan oil say the general license does not provide the needed ease of trade. The broad nature of the general license leaves many conditions open to interpretation, raising questions about what is allowed and what is prohibited, sources said.
PDVSA executives want specific guidance from the U.S. on which companies to trade with and clearer deal terms so it can track shipments and secure proceeds, they said.
U.S. banks are also reluctant to finance Venezuelan oil trade deals, three sources said, citing the complexity of the licenses.
One of the two sources said: “Some banks may not want to risk their handling or may feel the activity is not authorized… Banks may conduct more due diligence.”
Banks’ current reluctance to finance trade in Venezuelan oil makes little sense for the world’s largest trader, which has generated billions in profits in recent years and is flush with cash. However, this could cause problems for small businesses that decide to participate in the Venezuelan oil trade.
The Trump administration is issuing several general licenses at record speed as oil and gas companies show significant interest in investing in Venezuela’s energy infrastructure, the White House told Reuters on Friday.
“The president’s team is working around the clock to meet the requests of oil and gas companies,” spokesman Tyler Rogers said. The U.S. Departments of Energy and Treasury and PDVSA did not immediately respond to requests for comment.
The U.S. Treasury Department’s Office of Foreign Assets Control on Friday issued two more general licenses allowing oil and gas producers to operate in Venezuela. The move will allow Chevron, BP, Eni, Shell and Repsol, among others, to expand activities in the biggest easing of sanctions targeting production to date.
