USA Extends Wind-Down Window for Companies with Venezuela Assets

USA Extends Wind-Down Window for Companies with Venezuela Assets

Photo: Oleksii Liskonih


The USA Treasury Department has given four companies until November 19 to wind down their business or hold maintenance activities for “essential operations” in Venezuela.

By Rigzone – Jov Onsat

May 24, 2023

Tuesday’s authorization for transactions involving Petróleos de Venezuela SA (PDVSA) extends to Baker Hughes Holdings LLC, Halliburton, Schlumberger Ltd. and Weatherford International PLC. It waives certain prohibitions spelled out in Washington’s sanctions regime against the Maduro administration. The waiver is known as General License 8, and the previous issuance for the four firms, in November 2022, expires Friday.

The three USA oil majors and Turkmenistan-headquartered Weatherford International are allowed to engage with state-owned PDVSA in activities “necessary to the limited maintenance of essential operations, contracts, or other agreements”, the treasury’s Office of Foreign Assets Control (OFAC) said in the authorization.

These include “transactions and activities necessary to ensure the safety of personnel, or the integrity of operations and assets in Venezuela; participation in shareholder and board of directors meetings; making payments on third-party invoices for transactions and activities”.

Payments allowed are those for the fulfillment of local taxes and salaries of employees and contractors. But companies, including the four, remain subject to punitive sanctions for dividend payments to PDVSA or any entity in which the Venezuelan company holds an interest of 50 percent or more.

The authorization also permits transactions “necessary to the wind down of operations, contracts, or other agreements in Venezuela involving PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest”.

But it does not allow drilling, processing, transport and trade of oil and oil products from the Latin American country. Also remains banned are the design, construction, installation and improvement of any wells or facilities except when necessary for safety. Safety is also the only exemption for the prohibition on the contracting of additional personnel or services.

However the OFAC has granted Chevron Corp. a license to resume the production and exportation of oil and oil products from Venezuela to the USA. General License 41 was issued November 26, 2022 as a nod to a humanitarian agreement between the Maduro government and the Venezuelan opposition.

“This action reflects longstanding U.S. policy to provide targeted sanctions relief based on concrete steps that alleviate the suffering of the Venezuelan people and support the restoration of democracy”, the treasury said in a press release November 26, 2022.

The treasury has multiple times extended General License 8 for companies with Venezuelan assets since the Trump government’s issuance in January 2019 of an executive order extending sanctions to PDVSA and the Central Bank of Venezuela.

Washington in Executive Order 13857 reiterated the government of President Nicolás Maduro was illegitimate, contesting his reelection for another six years. The January 25, 2019 order also cited “human rights violations and abuses in response to anti-Maduro protests, arbitrary arrest and detention of anti-Maduro protestors, curtailment of press freedom, harassment of political opponents and continued attempts to undermine the Interim President of Venezuela and undermine the National Assembly”. It was referring to the parallel government of opposition leader Juan Guaido, which the USA backed but which dissolved last year.

Read More: Rigzone – USA Extends Wind-Down Window for Companies with Venezuela Assets

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