US opens door for Venezuela oil boom with new Treasury license

The U.S. Treasury Department on February 10 issued a long‑anticipated general license to facilitate oil and gas exploration, development and production in Venezuela, a move expected to help boost the country’s crude output.

According to foreign media reports, the license allows U.S. companies to provide American goods, technology, software and services necessary for oil and gas activities in Venezuela, which currently produces close to 1 million barrels of crude per day. 

The U.S. Energy Information Administration said Venezuelan output could increase by as much as 20% in the coming months.

Under the terms of the permit, contracts with Venezuela’s government or its state energy company PDVSA must comply with U.S. laws, and any payments to sanctioned entities must be made into a U.S.‑supervised fund. However, the license does not authorise the creation of new joint ventures or other entities in Venezuela for exploration or production.

The Treasury also authorised transactions to maintain existing oil and gas operations, including equipment repairs needed for exploration and production.

This step follows a series of relaxations in U.S. sanctions on Venezuela’s energy sector since U.S. forces captured President Nicolás Maduro in January, and after Washington granted prior licenses for oil exports, storage, imports and sales. The interim government led by Delcy Rodríguez agreed to a flagship $2 billion oil supply deal with the United States, which helped revive Venezuelan exports after a naval blockade drove exports to minimal levels in December.

Washington has also drafted a broader $100 billion plan to reconstruct Venezuela’s oil industry, aimed at welcoming foreign producers and service companies. Meanwhile, Venezuela’s National Assembly approved major reforms to the country’s hydrocarbons law, granting foreign firms greater autonomy to produce, export and retain proceeds, in hopes of attracting investment.

Major oil partners, including Chevron, Repsol, ENI and Reliance Industries, have applied for individual licenses to expand output or exports, although a backlog of such applications had previously slowed progress in expanding production and investment.

By Tamilla Hasanova