US mulls new sanctions on foreign firms in Venezuela

The White House says it will take measures within 30 days, even though it has just renewed Chevron's licence to work in Venezuela, writes Haik Gugarats

Washington is considering further sanctions against Venezuela's oil sector that would affect the ability of Chevron and foreign oil firms to operate in the country.

"Absolutely everything is an option with regards to pressure" on Venezuela, a senior US administration official says. The official made the remarks hours before President Donald Trump hosted Venezuelan opposition leader Juan Guaido at the White House on 5 February. Washington is keen to demonstrate that its year-long campaign to effect a change of government in Venezuela will continue, even though President Nicolas Maduro retains control of the government and military.

The US is particularly concerned about Caracas' dependence on Russian state-controlled Rosneft to export crude. "Whether it is Rosneft, Reliance, Repsol or Chevron… I would tread cautiously toward their activities… that are in support indirectly or directly of the Maduro dictatorship," the official says. "We are halfway through our maximum pressure campaign, and we are only moving in one direction… Their activities are clearly of concern." The US will implement "some impactful measures within the next 30 days", including sanctions, the official says.

Rosneft is the main foreign lifter of Venezuelan crude, supplying India's Reliance and its own Indian refining arm Nayara. Spain's Repsol takes oil in lieu of cash payments for its Venezuelan operations. Chevron last month renewed its authorisation from the US Treasury to continue operating in Venezuela until 22 April, and has started lifting synthetic crude from its PetroPiar joint venture with state-owned PdV.

The US administration says its previous waivers for Chevron were needed to preserve Venezuela's ailing oil industry for a future democratic government. Chevron says that its sales accounted for 2pc of Venezuela's exports last year and are permitted under the US sanctions regime to pay for expenses related to maintaining its joint-venture operations. The firm says that "non-US companies will fill the void and oil production will continue" if it leaves Venezuela.