Adds comment from Chevron
The US Treasury Department today imposed sanctions on Venezuelan foreign minister Jorge Arreaza, who until recently was the primary point of contact with President Nicolas Maduro's government.
"Arreaza is at the forefront of the former Maduro regime's attempts within the international community to thwart the democratic aspirations of the Venezuelan people," the State Department said.
Arreaza had been the only high-ranking Maduro government official who was left off the US sanctions list. He led talks with US government officials in January and February even after Washington officially recognized Venezuelan National Assembly speaker Juan Guaido as the country's interim leader.
Those meetings stopped after Arreaza publicized them to show that the US administration was still dealing with the Maduro government. The subject of conversations involved the safety of US citizens and diplomatic property in Venezuela, according to State Department special Venezuela envoy Elliott Abrams. The US withdrew its remaining diplomats from Caracas in March, citing safety concerns.
Arreaza via Twitter tied his addition to the sanctions list to his speech yesterday before the UN General Assembly, where he denounced US actions in Venezuela, "The reaction confirms that we are on the right path and it gives us greater strength to fight," Arreaza tweeted.
Treasury imposed sanctions on Venezuela's state-owned PdV in January. US refiners had until 28 April to wind down crude purchases from Venezuela, but those imports — roughly 500,000 b/d before the sanctions — have completely stopped already.
"We are still operating in Venezuela, where there is an enormous amount of resources, and one day that will begin to be developed again," Chevron chief executive Michael Wirth said today.
Chevron is one of Venezuelan national oil company PdV's main foreign partners, with key production operations in the Orinoco heavy oil belt and a related upgrader in the export terminal of Jose. Other western oil companies with Venezuelan assets are European firms Repsol, Eni, Total, Equinor and Shell. US oil field service providers and upstream firms participating in joint ventures in Venezuela have until 27 July to wrap up business in that country.
US companies are in "a very constructive dialogue with Treasury and with the State Department to ensure that they understand the objectives behind sanctions and that they understand their compliance obligations," an energy industry insider told Argus. "We also remind policymakers in Congress and in the administration of the harmful effects that sanctions can have when they are not targeted and when they begin to affect our companies' commercial interest globally."
A combination of sanctions and US pledges of humanitarian aid has failed to loosen Maduro's hold on power. But the US is not giving up on its strategy. Abrams, in a speech at Washington-based think tank Atlantic Council yesterday, made a bid for an inclusive government representing all political ideologies in Venezuela following Maduro's departure.
"I have a message to (Maduro's party) PSUV and followers of Hugo Chavez. You are watching the Maduro regime destroy his legacy. That is not my concern, but it should be your concern," he said.
The US supports Guaido's pledge to provide amnesty to current government officials who assist in the political transition, Abrams said. And while many of Guaido's advisers have outlined plans for major reforms in the economy and the oil sector, Abrams warned that "the structure of the economy has to be decided by the Venezuelans, it has to be debated, and cannot be decided by a small group."
The US is leading discussions with the IMF, World Bank and other international donors for a massive humanitarian and recovery package for Venezuela once Maduro steps down. "Every estimate I have seen is in the tens of billions of dollars" in aid to help rebuild basic services and reinvigorate the oil sector, Abrams said.
The US at the same time is threatening to expand the reach of sanctions to dislodge the Maduro government. "The transition is not going to be easy, and it can get worse before it gets better," Abrams said.
