Trump Approves More Venezuela Investment From Oil Firms

• The Treasury also issued a general license that will allow other companies to negotiate and enter contracts to pump oil and gas in Venezuela.
• The new U.S. general licenses require payments of oil or gas royalties or taxes to Venezuela or its state-run energy giant, Petróleos de Venezuela.
• The license announcement comes after Venezuela’s interim government made tweaks to its hydrocarbon law.

The Trump administration is officially paving the way for global oil companies to get back into Venezuela. 

The Treasury Department on Friday issued a general license allowing certain large oil companies to invest in new oil-and-gas operations in the Latin American country. The companies that made the list were Chevron, the only U.S. oil company currently operating in Venezuela, as well as some European rivals including Shell, BP, Italy’s ENI and Spain’s Repsol.

Earlier in January, Trump reportedly greenlit the expansion of American oil companies to start operations in Venezuela. 

Order Details

The Treasury granted a broad license permitting additional firms to discuss and sign agreements for extracting oil and gas in Venezuela, provided these deals receive authorization from the Treasury’s Office of Foreign Assets Control.

Under the updated U.S. general licenses, companies must pay any oil or gas royalties and taxes to Venezuela or its national energy company, Petróleos de Venezuela, but these funds will be deposited in a U.S. Treasury account for foreign governments. The Treasury Department also emphasized that dealings with organizations from Russia, North Korea, Cuba, Iran, and China remain forbidden.

Venezuela Hydrocarbon Law

The license announcement comes after Venezuela’s interim government made tweaks to its hydrocarbon law in bid to ease state control on its oil industry. However, major U.S. firms have been steering clear of making investments in Venezuela. 

Many companies including Chevron have signaled that it aims to raise its oil output in Venezuela. ConocoPhillips’ CEO Ryan Lance had said in a call with investors that the oil major will focus on recovering money owed under existing legal judgments in Venezuela. 

Oil Stocks

Stocks of major oil firms like Chevron (CVX), BP plc (BP), Shell Plc (SHEL) jumped between 0.5% to 1.7%.  

Read More: ROKU Stock Is Rallying Today – What Is Making Traders So Bullish?

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