Repsol obtains license to operate in Venezuela and boost oil production

The Spanish oil company Repsol has managed to obtain the long-awaited license from the United States to operate in Venezuela, in an agreement that aims to increase joint production of crude oil and gas in the South American country. This milestone comes after the signing of a covenant between Repsol and the Venezuelan state-owned company PDVSA on April 17, amid a context marked by Washington's recent announcement about the end of the easing of its oil embargo on Venezuela, which now requires individual licenses to operate in the nation. Venezuela's Minister of Petroleum, Tellechea, expressed optimism about this partnership with Repsol, highlighting that they expect the country's oil production to reach the figure of one million barrels per day this year, largely driven by the collaboration with the Spanish company. Currently, Venezuelan oil production stands at around 924,000 barrels per day, as indicated by the minister during an industrial forum. Tellechea emphasized the importance of having Repsol's participation in the Venezuelan oil market, celebrating that the company has obtained the necessary license to operate in the country. He also mentioned that other companies such as Chevron have also managed to obtain their respective licenses to operate in Venezuela, demonstrating a growing interest in participating in the energy sector of the Caribbean nation. Oil production in Venezuela has shown an upward trend, according to data from the Organization of the Petroleum Exporting Countries (OPEC), indicating that the country has managed to reach around 800,000 barrels per day, after averaging around 750,000 barrels in 2023 and 680,000 barrels in 2022. This increase in Venezuelan oil production has attracted the interest of various international companies seeking to take advantage of the opportunities offered by the country's energy market. The Office of Foreign Assets Control (OFAC), part of the U.S. Department of the Treasury, has recently approved operations for companies such as the French Maurel & Prom and service providers like Halliburton, Schlumberger Limited, Baker Hughes Holdings LLC, and Weatherford International. These specific licenses allow companies to work with Venezuela in the oil sector, within a regulatory framework aimed at ensuring transparency and legality of transactions. The United States had partially lifted sanctions on Venezuelan oil and gas in 2019, granting a six-month extension last year. However, the recent announcement of the termination of that license has created a new scenario in which companies interested in operating in Venezuela must apply for individual licenses to carry out their activities in the country, as Repsol has done in this case. Repsol, with a 40% stake in the joint venture Petroquiriquire with PDVSA, has estimated the liabilities of this partnership at around US$340 million. Petroquiriquire operates in various areas in the west and east of Venezuela, contributing to the production and extraction of oil in the country. Repsol's acquisition of the license represents a significant step in strengthening commercial relations between Spain and Venezuela in the energy sector, opening up new opportunities for cooperation and mutual development in this strategic sector.