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