Venezuela looks to boost oil output following let-up in US sanctions
Venezuela looks to boost oil output following let-up in US sanctions
Venezuelan state-run oil company PDVSA is in talks with equipment and service providers to help boost its depressed crude output amid the temporary lifting of U.S. sanctions against the country.
Breanne Deppisch, Energy and Environment Reporter - NOV 6, 2023
Venezuelan state-run oil company PDVSA is in talks with equipment and service providers to help boost its depressed crude output amid the temporary lifting of U.S. sanctions against the country.
The efforts come after the Treasury Department’s Office of Foreign Asset Controls, or OFAC, announced a six-month reprieve from most sanctions on Venezuela’s oil sector in October, allowing it to produce, export, and sell its crude oil, gas, and fuel supplies to customers largely without limitation.
Sources told Reuters that PDVSA’s primary goal is to find either local or foreign oil service companies to help reactivate rigs stored in the country, including many that are idled or are missing parts.
The Biden administration lifted sanctions on Venezuela enacted in 2019, contingent on Venezuelan President Nicolas Maduro’s regime honoring a deal it struck last month with opposition parties aimed at ensuring a “free and fair” presidential election in 2024.
"The OFAC has issued an unprecedented general license that suspends the broad siege imposed to PDVSA," PDVSA’s CEO and oil minister, Pedro Tellechea, said on social media.
Still, the new licensing authority is unlikely to boost the country’s oil output in the near term.
The nation’s oil production currently averages roughly 780,000 barrels per day, the outlet reported. Despite being home to the world’s largest crude reserves, Venezuela currently has just one active oil rig in operation, a drastic decline from the more than 80 units that were operational in 2014, according to data from Baker Hughes.
"The biggest short-term benefit, in an election year, is to sell oil at a full price to its most profitable market, the United States," Francisco Monaldi, the director of the Latin American energy program at Rice University’s Baker Institute for Public Policy, said on social media following news of the temporary sanctions reprieve.
"Even in case sanctions are reinstated, the money brought in and the limited additional production will be a 'bird in hand'" for Maduro's administration, he added.
https://www.washingtonexaminer.com/policy/energy-environment/venezuela-looks-boost-oil