US allows oil firms more time to wind-down operations in Venezuela

The US has extended a general license to allow a few transactions with Venezuelan state-owned oil company PDVSA, necessary to wind-down operations.

PHOTO: Oil barrels with Venezuela's flag. Getty Images

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has extended the general license through 15 November.

It has allowed transactions with four major US-based oil service firms - Halliburton, Schlumberger, Baker Hughes, and Weatherford International. These companies, however, are prohibited from drilling, processing, transporting or shipping of Venezuelan-origin oil.

The US extended this license at a time of sustained political and economic tensions in Venezuela.

Brent’s prices gained after Washington scrapped its “limited sanctions relief” deal on Venezuela in April after the country’s government led by President Nicolás Maduro failed to fully meet the commitments made regarding holding fair presidential elections in the second half of this year.

The US had previously issued a 45-day window to Venezuela as a “wind-down license” to gradually cease all operations.  

According to OPEC's latest oil market report, Venezuela produced around 809,000 b/d of crude oil in March. Its oil exports dropped 38% in April after the re-imposition of sanctions, Reuters reported.

The country can produce about 3.2 million b/d of crude, according to the US Energy Information Administration (EIA).

By Aparupa Mazumder 

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