Venezuela oil sector hit by loss of its widest US license
By Marianna Parraga and Deisy Buitrago
HOUSTON/CARACAS, April 18 (Reuters) -Venezuela's loss of a key U.S. license that allowed it to export oil to markets around the world and secure investment is expected to hit the volume and quality of its crude and fuel sales while prompting a flurry of requests for individual U.S deal authorizations.
U.S. officials had warned that absent progress by President Nicolas Maduro's administration on implementing an electoral roadmap agreed last year, the U.S. would not renew license 44, which since October has eased oil sanctions in place for the last five years.
On Wednesday, the Treasury gave companies 45 days to wind down pending transactions, particularly crude and fuel sales, through a more restrictive license.
It also said it would process specific authorization requests for business with Venezuela, a commitment Venezuelan officials said they expect the U.S. to honor. Many companies have waited for years to have energy deals involving Venezuela approved by Washington.
But the Treasury also explained that "entering into new business, including new investment that was previously authorized under license 44, will not be considered wind-down activity," casting doubts on what type of transactions will be allowed.
Authorizations previously granted to oil firms including Chevron CVX.N, Repsol REP.MC and Eni ENI.MI were not withdrawn, which secures Venezuela's oil flows to the United States and Europe.
POLITICAL MOVES
The withdrawal of the most significant element of U.S. sanctions relief marks a major step back from President Joe Biden's policy of re-engagement with Maduro.
However, it stops short of a return to the "maximum pressure" campaign waged under former President Donald Trump and could change depending on progress towards the election in the coming months.
Venezuela's opposition is negotiating to choose its candidate for the July 28 presidential election, after both the winner of its primary and her alternate were prevented from registering.
The license had allowed Venezuela's state company PDVSA to expand exports to pre-pandemic levels, improve cash flow and secure imports of diluents and fuel for the domestic market.
Under a separate authorization, about one-fifth of Venezuela's exports are now sent by Chevron to the U.S. PDVSA and the company have begun talks to expand one of its joint ventures' areas.
Other project expansions are expected to be green-lit by Venezuelan authorities before the 45-day wind down period, oil minister Pedro Tellechea said on Wednesday.
RUSHING TO TAKE CARGOES
In March, PDVSA's oil exports climbed to some 900,000 barrels per day (bpd), their highest level in four years as customers rushed to complete purchases ahead of the expiration. But the backlog of tankers waiting to load at Venezuelan ports has not eased significantly, shipping data showed.
The six weeks granted by the U.S. to complete transactions might not be enough to resolve the bottleneck entirely, forcing some oil importers to apply for specific licenses, traders said.
Under the previous license and separate authorizations, Venezuela's crude production expanded to 874,000 bpd in March, and it added two operational drilling rigs.
Without the license, PDVSA is expected to resort again to little known intermediaries to sell its oil under price discounts, mainly to Asia, unless enough U.S. individual authorizations are issued, experts said.
PDVSA's finances, eroded by five years of sanctions, will also take a new hit, limiting access to hard currency needed for affording everything from labor to procurement.
EXPLAINER-Expiration of US oil license to Venezuela to impose a ceiling on output growth nL2N3GQ1C9
Reporting by Marianna Parraga in Houston, Matt Spetalnick and Daphne Psaledakis in Washington, and Deisy Buitrago in Caracas
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
