Daily Management Review

The US And Venezuela Are Negotiating Further Oil Sanctions Waivers - Reuters


Venezuela and the United States have made headway in talks that might provide sanctions relief to Caracas by permitting at least one extra foreign oil firm to take Venezuelan crude oil for debt settlement if President Nicolas Maduro resumes talks with the opposition in Mexico, according to a Reuters report quoting source information.
Caracas and Washington envoys have met numerous times in Doha since last year in a renewed effort to resolve Venezuela's long-running political and economic crisis, including negotiations about a presidential election.
Separate discussions between Maduro's envoys and Venezuela's opposition are likely in the coming weeks in Mexico, according to sources.
Washington has been attempting to foster talks between Maduro and Venezuela's political opposition over elections and other demands. Sanctions were implemented following Maduro's victory in 2018, which many Western countries saw as a fraud.
According to two sources, one of PDVSA's joint venture partners, Maurel & Prom, could receive a US comfort letter to accept Venezuelan oil as debt payments this time.
A spokesman for Maurel & Prom acknowledged the French company "made a request to US authorities to this effect," but declined to clarify.
The US State Department, Venezuela's and Qatar's foreign ministries, as well as the Venezuelan state oil corporation PDVSA, did not respond to Reuters’ calls for comment.
Reuters could not immediately confirm whether the US will ease penalties in response to a resumption to the Mexico talks.
"Should Venezuela take concrete actions toward restoring democracy, leading to free and fair elections, we are prepared to provide corresponding sanctions relief," a White House spokesperson said last week. "At this time, Venezuela has not taken the necessary steps, and our sanctions remain in effect."
Sources in Washington confirmed that the talks have made significant progress in recent weeks, but cautioned that discussing final agreements at this time would be premature.
The talks once again thrust Qatar, a global energy and investment powerhouse, into the international spotlight. Doha has hosted more than a year of discussions between the United States and Iran, resulting in prisoner swaps and money releases.
According to the sources, the agenda for the US-Venezuela meetings has included a long-standing plea by Venezuela's opposition to release detainees, election assurances, and possible solutions to the influx of Venezuelan migrants in the US, in addition to prospective sanctions relief.
The United States said last week that it will resume deportations of Venezuelans who illegally cross the border between the United States and Mexico, in an effort to reduce a record number of migrants. According to two of the sources, the decision was made after reaching a deal with Maduro's envoys in Doha.
Earlier this year, US officials devised a broad proposal to remove sanctions on Venezuela's oil sector, which would allow more companies and countries to purchase the South American country's crude if the country proceeded towards free elections.
The idea suggested reshaping oil sanctions against Venezuela by revising existing US executive orders or issuing new ones so that customers in Europe and other countries could resume Venezuelan oil imports in a structured, organised manner.
If new authorizations are obtained this time, it will provide relief to energy companies who have been attempting for years to get paid in Venezuela. Longer term, they may help the South American country achieve its objective of doubling crude output.
In the past, Washington has held out the bait of easing sanctions, but it has resulted in relatively few authorizations. Since November, Chevron has been permitted to increase operations in Venezuela and export oil to the United States.
A rising number of energy businesses are standing up for similar approvals in order to cash in on pending debt in Venezuela and reactivate oil and gas production alongside PDVSA.
Last year, Repsol and Eni received US comfort letters, allowing them to continue imports of Venezuelan crude as a means of repaying debt.