U.S. opens door for oilfield services to support Venezuela production revival
(Bloomberg) – The U.S. government issued a general license to allow oilfield-service companies to work in Venezuela as the Trump administration eases sanctions and pushes to rebuild the nation’s crude infrastructure.
The license issued by the Treasury Department allows U.S. firms to explore, develop and produce oil and natural gas in Venezuela under certain limited conditions, according to a statement Tuesday.
The move is the latest in a series of steps Washington has taken to entice U.S. companies to revive output from Venezuela’s vast crude reserves after last month’s capture of strongman Nicolás Maduro.
Carlos Bellorin, an executive vice president at Welligence Energy Analytics, said investors are interpreting the license “as a stepping stone, raising expectations that a broader license for operators could follow.
In January, the US issued a general license that allowed for a wide range of crude operations, including exporting, transporting, refining and buying and selling crude. The general license announced Tuesday involves tasks such as geological mapping, reservoir analysis and related tasks that augment the commencement of oil production.
However, the license does not allow new joint ventures in Venezuela. US people and firms will need to provide detailed plans to the State Department and Department of Energy for any work in the country, according to the statement.
The Treasury Department is also preparing to issue a general license allowing companies to pump oil in Venezuela.
Oilfield service companies are hired by producers to assess discoveries, drill wells, and enhance output from older assets. SLB Ltd., Halliburton Co. and Baker Hughes Co. dominate the sector.
SLB has been working in Venezuela for Chevron Corp., operating under a U.S. license held by the supermajor. The other large contractors scaled back or shut down their primary operations in the country as the previous regime tightened control over the energy industry.
