Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
General License 44 of the United States, which suspended part of the sanctions on the Venezuelan oil sector, the debt of the state-owned PDVSA, as well as on gold mining, expires this Thursday the 18th, so if there is no extension, the measures could come back into force. The exemption was published by the US Treasury Department on October 18 with a validity of six months subject to review, within the framework of the progress at that time in the dialogues between the Government of Nicolás Maduro and the opposition majority represented by the Unitary Platform (PU) in Barbados.
The Office of Foreign Assets Control (OFAC) allowed international companies with License 44 to produce and sell oil and gas from Venezuela, as well as pay for related goods and services, invest, and deliver oil and gas to creditors of the Government of that country, through the United States financial system. In this way, foreign firms have been able to work without the pressure that any wrong move could be violating the sanctions previously applied by Washington.
With this relief, Caracas hoped to recover crude oil production, which fell to historic lows in 2019, even below 500,000 barrels of oil per day, due to the economic crisis derived from the controls that the State imposed on the economy and the deployment of sanctions issued to pressure Maduro, who in January of that year was sworn in for his second term as president, after the majority opposition, the United States, the European Union and the countries of the region gathered in the Lima Group, did not recognize the legitimacy of the December 2018 presidential elections.
However, the slow progress in production in the last six months, without moving away from 800,000 barrels per day according to OPEC data, calls into question whether the reimposition of sanctions can generate a drastic drop. Arreaza said that Chevron has projects in Venezuela with a capacity of 250,000 barrels per day, with current production close to 50% of that goal. “Given the political uncertainty that still exists in the country and the lack of credibility that the government has until now, thinking about new developments, new projects, seems to have a low possibility,” he added.
The Treasury Department has not given specific statements about the future of License 41, granted in November 2022. But it has been explicit about License 44, which from its inception was subject to the Maduro Government allowing the registration of presidential candidates of the Unitary Platform following the Venezuelan legal and constitutional framework.
After the signing of agreements in October, the detente continued in December with the US handover of Alex Saab, a Colombian businessman with ties to Venezuela and whom the Maduro Government describes as a “diplomat”, in exchange for the release of ten Americans detained in Venezuela. In January, the State Department warned that the exemption would not be extended after the Supreme Court of Justice, which responds to Maduro, decided to ratify the administrative disqualification from holding public office that weighs on Maria Corina Machado, the winner of the primaries opponents.
Although meetings were held in recent days between representatives of the US and Venezuela, on Monday Maduro downplayed the effects that the reimposition of sanctions could have on the Venezuelan economy. “I tell the negotiators to tell President Biden the following message: ‘If you want, I want, I you don’t want, I don’t want.’ In Caracas: ‘If you want, I want, if you don’t want, I don’t want’. Final point,” he commented on his program Con Maduro +.
