The U.S. Department of the Treasury issued on Tuesday a general license to facilitate the exploration and production of oil and gas in Venezuela, a long-awaited measure that could help increase production in the country.
Washington has relaxed sanctions against Venezuela’s energy sector since U.S. forces captured President Nicolás Maduro in early January. Previously, it granted several general licenses to facilitate exports, storage, imports and sales of Venezuela’s oil.
Oil companies need authorization from the U.S. to use specialized equipment in Venezuela and to import the platforms needed to expand the country’s oil production, currently at nearly 1 million barrels per day. The U.S. Energy Information Administration said on Tuesday that Venezuela’s crude oil production could rise by up to 20% in the coming months.
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The new general license authorizes the supply of goods, technology, software or services from the U.S. for the exploration, development or production of oil and gas in Venezuela.
The license provides that any contract for the transactions authorized to be signed with the Government of Venezuela or with the state-owned energy company PDVSA must comply with U.S. laws, with disputes to be resolved in the United States. Payments to any sanctioned entity must be made into a fund supervised by the United States.
The license does not authorize “the formation of new joint ventures or other entities in Venezuela to explore or produce oil or gas.”
Transactions to maintain oil or gas operations, including repairs of equipment for exploration or production, were authorized.