Caracas, July 25, 2024 (venezuelanalysis.com) – Venezuela’s state oil company PDVSA will reportedly restart oil exports to Indian refiner Reliance Industries.
Caracas has also offered beneficial arrangements for foreign corporations in joint natural gas initiatives with Trinidad & Tobago.
According to Bloomberg, India’s corporate giant received a green light from the US Treasury Department to resume purchases of Venezuelan crude.
Reliance had received 90% of Venezuela’s exports to India during a recent six-month period that saw Washington loosen restrictions on the Caribbean nation’s oil sales. India’s state-owned Oil and Natural Gas Corporation (ONGC) is allegedly lobbying for a similar approval.
Since 2017, the USA has levied financial sanctions, an export embargo, secondary sanctions and a raft of other measures against Venezuela’s oil industry in a bid to choke off the country’s main source of foreign income.
In October 2023, the Biden administration issued General License 44 (GL44), a six-month sanctions waiver allowing transactions with Venezuela’s energy sector.
Though the license was followed by a warning against corporations investing in the South American country, it did allow PdVSA to export crude with no need for unreliable intermediaries or levying significant discounts.
Washington reimposed wide-reaching sanctions after alleging that the Nicolás Maduro government had not fulfilled an electoral agreement signed with the Venezuelan opposition.
The US Treasury Department granted a 90-day wind-down period and demanded that corporations apply for individual licenses to deal with PDVSA.
Though international firms would not be violating US sanctions by purchasing Venezuelan crude, since they are not under US jurisdiction, few want to risk being targeted by secondary sanctions.
In the wake of the 2019 oil embargo, Venezuela looked at India to step in as a major destination for the 500,000 barrels per day (bpd) it was shipping to US refineries.
However, Trump administration officials threatened Indian companies against doing business with Caracas.
Venezuela’s oil output plummeted under US sanctions, reaching decades-lows before recovering. It recently hit a five-year high but has yet to surpass 1 million bpd.
PdVSA has mostly relied on private partners to recover the nation’s most important industry. The Maduro government has sought to offer increased benefits in a bid to attract foreign investment.
Some companies have invoked the so-called “Chevron model” between PdVSA and the US oil giant as a blueprint. Chevron received a US Treasury license in late 2022.
It holds minority stakes in four joint ventures but has taken over field operations and crude sales, despite Venezuelan oil regulations demanding that PDVSA assume those responsibilities.
Venezuela’s National Assembly recently approved a 15-year extension of Petroindependencia, a company where Chevron owns a 34% stake, until 2050.
PdVSA’s joint ventures with Chevron are currently pumping an estimated 200,000 bpd.
Italy’s Eni, France’s Maurel & Prom and Spain’s Repsol are other companies that have ramped up activities in their Venezuelan projects in recent months, often receiving crude shipments to offset existing debts.
Repsol Chief Executive Josu Jon Imaz reported that the company is receiving a higher volume of Venezuelan crude as part of a new dynamic. He also revealed that Repsol is upping its investment in the Petroquiriquire venture.
Apart from joint oil ventures, the Maduro government has touted natural gas opportunities to foreign partners.
A constitutional loophole allows shares to be fully owned by private firms in gas projects, as opposed to oil initiatives where PdVSA is required to hold a majority stake.
On Wednesday, PdVSA signed off on a 20-year concession to BP and Trinidad and Tobago’s National Gas Company (NGC) to explore the Venezuelan side of an offshore natural gas field shared with Trinidad and Tobago.
The Cocuina-Manakin field extends into Venezuela’s so-called Plataforma Deltana in its Atlantic waters and contains a reported 1 trillion cubic feet (tcf) of natural gas.
According to Reuters, the agreement signed by Venezuela’s Oil Minister and PdVSA President Pedro Tellechea and Trinidad’s Stuart Young also set terms for the sale of gas produced on the Venezuelan side as well as a sign-on bonus payment.
BP’s and NGC’s respective stakes were not disclosed. PdVSA is not a participant in the joint venture, with the Venezuelan side only charging taxes and royalties.
Caracas approved a similar 20-year concession to NGC and Shell to explore the 4 tcf Dragon field, entirely located in Venezuelan waters.
The presence of US sanctions alongside demands that PDVSA receive no cash directly has led Venezuela to accept a reduced role in the projects.
Venezuela currently counts on the world’s eighth-largest proven natural gas reserves, estimated at over 200 tcf.
Venezuela Analysis / ABC Flash Point News 2024.
The USA want all the Venezuela oil and Canada wants to confiscate all the gold reserves?
The USA does not stand a chance against Russian technology, combined with Iranian expertise and China’s unlimited supply of useless dollars.