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Trump Administration Ready To Ramp Up Sanctions On Venezuela

The Trump administration is keeping a close eye on companies that are still doing business with Venezuela and is ready to mount pressure on them, up to and including sanctioning them, a senior administration official told media as quoted by Reuters.

“Everything is an option as regards creating pressure, whether it’s towards Russian entities that are supporting Maduro or others. So, absolutely, that ... remains on the table,” the official said. “Whether it’s Rosneft, whether it’s Reliance, whether it’s Repsol, whether it’s Chevron here in the United States, I would tread cautiously towards their activities in Venezuela that are in support, directly or indirectly, of the Maduro dictatorship because ... we’re halfway through our maximum pressure campaign.”

Reuters reports that some industry executives were surprised by the tone of the comments because in the last few months Washington has not made any threats or warnings to oil companies operating in Venezuela. In fact, it even extended Chevron’s sanction exemption last month, allowing the company to continue operating in the country for three more months, until April 22.

Chevron operates a joint venture with Venezuela’s PDVSA in the country that is home to the world’s most abundant oil resources. Petroboscan, the joint venture, produced around 200,000 bpd as of October, with Chevron’s share of this at 34,000 bpd. The U.S. supermajor holds a 30-percent stake in the venture.

Russia’s Rosneft has four joint ventures with PDVSA that produce oil and it also became the largest receiver of Venezuelan crude last year: the Russian company sold the oil on behalf of PDVSA and kept the proceeds as payment on billions of dollars in loans to the embattled Venezuelan company.

Yet even Chevron is selling PDVSA oil, Reuters reported last month. According to industry sources, this did not violate sanctions if the proceeds from the sales were used to pay down debt accrued by the joint ventures PDVSA operates with its foreign partners.

By Irina Slav for Oilprice.com

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