Venezuela energy projects
Oil and power work in Venezuela gets a narrow Treasury opening
OFAC’s two Venezuela licenses let some supplies, services and contract talks move forward, but only inside tight rules on payments, counterparties and follow-on approval.
The Treasury Department’s sanctions office is publishing General Licenses 48A and 49A, which replace earlier versions and give a limited path for work tied to oil, gas, petrochemicals and electricity in Venezuela. Separate authorization is still needed for performance of contingent investment contracts, and some transactions remain off limits.
- OFAC published General Licenses 48A and 49A for Venezuela energy work.
- One license covers certain supplies and services for oil, gas, petrochemicals and electricity.
- The other allows negotiations for contingent investment contracts.
- Actual performance under those contracts still needs separate authorization.
- Payments, counterparties and reporting remain tightly controlled.
In Washington, Treasury’s Office of Foreign Assets Control, known as OFAC, has given companies a limited opening to work on some Venezuela energy projects. The change is narrow. It covers certain goods, services and contract talks tied to oil, gas, petrochemicals and electricity, but it does not lift sanctions more broadly.
OFAC published General Licenses 48A and 49A after issuing them in March. Those licenses replace earlier versions and spell out exactly what can move forward, and what still needs separate approval.
What the licenses allow
General License 48A covers transactions that are ordinarily needed to provide goods, technology, software or services for oil, gas, petrochemical or electricity work in Venezuela. The license also reaches some support activity around those operations, including shipping, logistics, marine insurance, port services, maintenance and repairs.
General License 49A goes a step further, but only partway. It lets people negotiate and enter into contingent contracts for new investment in those same sectors. The contracts can cover new projects, expansion of existing operations and the formation of new joint ventures. But the actual performance of those contracts still has to be separately authorized by OFAC.
What stays off limits
The licenses are still fenced in by rules on money, counterparties and ownership. Contracts with the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or entities in which PdVSA holds a large stake must use U.S. law and send disputes to the United States. Payments to blocked persons, with limited exceptions for local taxes, permits or fees, must go into a Treasury-directed account.
The licenses also exclude a range of activity. They do not allow debt swaps, gold payments or payment terms in digital currency tied to the Venezuelan government. They do not cover transactions involving certain foreign-linked persons or entities, blocked vessels, new joint ventures for the covered sectors, or dealings tied to diluents exported to Venezuela. And they do not override other federal rules, including Commerce Department export controls.
Anyone exporting, reexporting, selling, reselling or supplying covered goods or services under General License 48A has to file detailed reports, including the parties involved, what was provided, when it happened and any taxes or fees paid to the Venezuelan government.