News
07/01/26
US details plans to take over PdV sales: Update
Updates with more details throughout Washington, 7 January (Argus) — US
president Donald Trump's administration is in talks with Caracas to
"indefinitely" take over oil sales by state-owned PdV and will offer partial
sanctions relief for Venezuela's oil sector. The US has already begun marketing
Venezuelan crude "in the global marketplace for the benefit of the United
States, Venezuela, and our allies", the US Department of Energy (DOE) said. The
US will work with leading oil trading companies and major banks to finance those
sales, according to a DOE factsheet. The US will partially lift sanctions on the
Venezuelan oil sector but the sales proceeds will be deposited in US-controlled
bank accounts, the DOE said. As a first step, the US will take possession of an
estimated 30mn-50mn bl of crude held in floating and onshore storage in
Venezuela, US energy secretary Chris Wright said at the Goldman Sachs Energy,
CleanTech and Utilities Conference in Miami, Florida, on Wednesday. Then
"indefinitely, going forward, we will sell the production that comes out of
Venezuela into the marketplace", Wright said. The US would supply the diluent
required to enable the extraction and transportation of the heavy crude
Venezuela produces, Wright said. "As we make progress with the government, we'll
enable the importing of parts and equipment and services to kind of prevent the
industry from collapsing, stabilize the production, and then as quickly as
possible, start to see it growing again." The US will authorize Venezuela's
imports of select oil field equipment, parts and services, the DOE said. The DOE
also committed the US to working with interim Venezuelan authorities to repair
Venezuela's dilapidated electricity grid. Taking these steps will eventually
lead to the return of more US companies to Venezuela, Wright said. The DOE
factsheet provides little detail on how the US will transport the initial batch
of Venezuelan crude held in storage or on the marketing arrangements. The US in
December imported 120,000 b/d of Venezuelan crude, under a sanctions waiver held
by Chevron. The bulk of Venezuelan crude is heading to China, where independent
refiners are the only buyers, to the tune of 430,000 b/d in 2025. Cuba imported
some volumes as well. The DOE factsheet does not explicitly state whether the US
will prohibit Venezuelan sales to specific destinations. Venezuela's crude
output was 934,000 b/d in November, according to an average of Opec secondary
sources including Argus . "We think short term, you might see [an additional]
250,000 b/d of Venezuelan oil come to the market over the next year," investment
bank JP Morgan vice president Stephen Jury said on Wednesday. What's next? The
plan outlined by Wright is the result of rapid improvisation of Trump's
objectives in Venezuela following the 3 January US special forces operation that
captured the country's president, Nicolas Maduro, and transported him to the US
on drug trafficking charges. The Trump administration said it is working with
interim president Delcy Rodriguez to accomplish its goals. Rodriguez has
combined publicly defiant rhetoric with actions that aim to implement
Washington's demands, with which PdV and its main foreign partner Chevron are
now racing to comply. PdV said on Wednesday it is "negotiating with the US to
sell volumes of oil" on "strictly commercial" terms, without specifying the
amount. The sale will be carried out "under a framework similar to the one with
international companies such as Chevron", PdV said. Chevron already holds a
company-specific waiver from the US Treasury Department's sanctions enforcement
arm, the US Office of Foreign Assets Control (Ofac). That waiver restricts
Chevron to importing Venezuelan crude only into the US, among other conditions.
The potential buyers of Venezuelan crude will have to apply for waivers as well,
unless Ofac grants a general exemption. Treasury did not immediately comment on
plans to provide sanctions relief for Venezuela's oil industry. PdV is not in a
position to quickly deliver any volumes beyond those in floating storage because
of long-term operational issues and recent major equipment outages. Uncertainty
after the recent seizure of Maduro has led some PdV workers to avoid reporting
for work. "PdV is working at minimal capacity", a PdV source told Argus .
"Operational areas [E&P and upgrading] are half working. Storage is full." Three
out of four major upgrading units needed to make Venezuela's extra-heavy crude
oil more easily transportable are still down after unexplained explosions and
fires in recent weeks, following the US build-up of military forces near
Venezuela, the source said. Wright is scheduled to meet with US oil executives
on the sidelines of the Goldman conference to discuss details of the US
involvement in Venezuela's oil sector. Trump in turn will discuss Venezuela with
US oil executives at the White House on 9 January. By Haik Gugarats, Carlos
Camacho and Chris Knight Send comments and request more information at
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