Five Major Oil Companies Resume Operations in Venezuela After U.S. Blessing

MIAMI – The U.S. Department of the Treasury issued licenses approving the resumption of oil and gas activities in Venezuela to five major multinational companies on Thursday as part of the administration’s efforts to revitalize investments in the South American nation’s crumbling oil infrastructure.

Venezuela’s state-owned oil company–the P.D.V.S.A–has experienced record-low oil output in recent years as the firm has been closely linked with the Venezuelan regimes of Hugo Chávez and the now deposed dictator, Nicolás Maduro.

Allegations of corruption, incompetent leadership, and gross mismanagement have plagued the oil company since the firm was nationalized in 1976.

In 2003, socialist firebrand Hugo Chávez further integrated the company within his administration, tightening government oversight over revenues and reallocating the company’s monies to fund the government’s expansive social programs for the masses.

Since a midnight assault into Caracas by U.S. special forces operatives, resulting in the deaths of at least one hundred Cuban and Venezuelan security personnel, and the capture of Maduro and his wife at a military compound in the capital of Caracas, Venezuelan oil reserves have bottlenecked at local installations and coastal sea ports as the U.S. halted exports to Cuba and Venezuelan allied nations in China and Russia.

In January, following Maduro’s capture, Venezuelan oil output dropped to 880,000 bpd. The reduction was sparked mainly by a massive U.S. naval blockade as the administration moved to crack down on the illicit drug trade in the region. Output has since surged as the U.S. Treasury moved to streamline oil licenses for U.S. companies.

Critics of the White House, however, have criticized the administration’s support for the Venezuelan Interim President Delcy Rodríguez, accusing the administration of betraying the country’s democratic freedom movement under the opposition leader and Nobel Peace Prize winner, María Corina Machado.

The Trump administration refutes these claims, arguing that the United States asserts the necessity of cooperating with any government that has control over the key institutions of power, including its local security forces and the Venezuelan Armed Forces.

Under the Rodríguez, who was Maduro’s vice president during his tenure, and Venezuela’s No. 2 in command, Interior Minister Diosdado Cabello, opposition groups say that these figures are part of the Maduro government, and that the military operation leading to Maduro’s downfall should not have ended there.

U.S. Energy Secretary Chris Wright, during a visit with Rodríguez in Caracas, made clear that the United States “will continue to control the sale of oil and the flow of funds until a truly representative government is established in Venezuela.”

The U.S. Department of the Treasury on Friday followed through on its program by issuing two general licenses allowing multinational oil companies to resume oil and gas operations in Venezuela.

The department announced that it will allow Chevron, BP, Italy’s Eni Spa, Shell, and Repsol to re-enter the South American pariah state after years of exile during the socialist rule of previous Venezuelan governments.

The U.S. authorization to resume operations will require Venezuelan royalty and tax payments to be routed through the Foreign Government Deposit Fund.

Other U.S. licensing will also allow other international companies to enter into contracts with the Venezuelan P.D.V.S.A. to sponsor new investment opportunities in the nation’s oil sector with U.S. government approval.