US authorises oil companies to restore Venezuela infrastructure

The US has cleared the way for American companies to supply equipment and services needed to restore Venezuela's ailing oil and gas infrastructure, in the most substantial expansion of sanctions relief since Washington seized control of the country's energy sector.

General License 48, issued on February 10 by the Treasury Department's Office of Foreign Assets Control (OFAC), greenlights "transactions ordinarily incident and necessary to the provision from the United States or by a US person of goods, technology, software, or services for the exploration, development, or production of oil or gas in Venezuela."

The licence specifically covers "transactions for the maintenance of oil or gas operations in Venezuela, including the refurbishment or repair of items used for oil or gas exploration, development, or production activities," according to the official text. It also encompasses shipping coordination and port services involving state-run facilities.

The measure represents Washington's most significant step yet to facilitate Venezuela's oil sector recovery following the January 3 capture of Nicolás Maduro by US forces. Previous authorisations issued in recent weeks addressed crude trading and imports of chemicals used to dilute Venezuela's viscous petroleum for transportation.

However, stringent conditions reflect Washington's intent to retain oversight of the sanctions-hit sector. Contracts with Venezuela's government or state oil company PDVSA must "specify that the laws of the United States or any jurisdiction within the United States govern the contract and that any dispute resolution under the contract occur in the United States," the licence states.

Monetary transfers to blocked persons, excluding local taxes, permits or fees, must be deposited into "the Foreign Government Deposit Funds, as specified in Executive Order 14373 of January 9, 2026, or any other account as instructed by the US Department of the Treasury."

The licence explicitly prohibits several categories of activity, including "payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela, including the petro [a botched crypto token launched by Maduro in 2017]."

It also bars transactions involving entities in Russia, Iran, North Korea, Cuba or China – all close allies of the deposed president – or "any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons." The unblocking of sanctioned property and dealings with blocked vessels are also prohibited.

Crucially, the licence does not authorise "the formation of new joint ventures or other entities in Venezuela to explore or produce oil or gas," nor does it permit "any transactions or dealings related to the exportation or reexportation of diluents, directly or indirectly, to Venezuela."

Firms using the licence must file comprehensive reports with the State and Energy Departments detailing participating parties, goods or services transferred, transaction timing and Venezuelan government payments. Companies must submit initial reports within 10 days of their first transaction, with updates required every 90 days thereafter.

The authorisation will open opportunities for oilfield service providers that have advocated for expanded Venezuelan engagement. Halliburton, which exited the country in 2019 due to sanctions compliance, previously stated it requires established commercial and legal frameworks before contemplating a return to operations that once generated approximately $500mn annually.

Energy analysts say the licence will assist major service contractors whilst enabling incumbent operators to enhance efficiency at existing facilities. According to Politico, Eric Smith of Tulane University's Energy Institute noted that firms already present, including Chevron and Spain's Repsol, could leverage the authorisation to improve performance at current investments rather than deploying significant new capital.

Chevron remains the only significant US producer with Venezuelan operations, allowed by a special waiver, after ExxonMobil and competitors departed two decades ago when former president Hugo Chávez nationalised foreign petroleum assets. The company has reiterated its commitment to US regulatory compliance whilst prioritising operational integrity.

Venezuelan production stands at approximately 1mn barrels daily, a far cry from the 3.4mn b/d recorded when Chávez assumed power in 1999. Energy officials estimate output could climb in coming months as sanctions relief enables enhanced operational activity, though the extent remains uncertain without comprehensive infrastructure investment.

The licence follows last month's approval by Venezuela's National Assembly of sweeping reforms opening the oil sector to private investment, abandoning more than two decades of socialist policies. Following Maduro’s ouster, acting president Delcy Rodríguez's administration has concluded a $2bn oil supply arrangement with the United States, supporting export recovery after years of restrictions, corruption and mismanagement.

Meanwhile, multiple major energy companies including Chevron, Repsol, ENI and Reliance Industries have sought individual authorisations to expand Venezuelan operations. Treasury officials are developing specific licences for firms pursuing enhanced or resumed in-country activities.

The first Trump administration slapped comprehensive sanctions on Venezuela's oil sector in 2019 as part of an “maximum pressure” campaign which failed to topple Maduro's regime. Trump has pledged that Venezuelan crude sale revenues will benefit the population, though Washington retains direct oversight of export proceeds as leverage over Rodríguez's interim administration, which is expected to comply with US orders and steer a yet-to-be-defined transition away from Chavismo.

The latest authorisation does not permit exploration or production activities, which would require separate licensing. The prohibition on forming new joint ventures signals Washington's cautious approach, seeking to stimulate output without completely normalising commercial relations.

Industry specialists say meaningful Venezuelan production expansion would demand sustained multi-year investment to rehabilitate severely degraded infrastructure and restore field productivity following chronic underinvestment. Whether calibrated sanctions relief will attract the necessary capital for comprehensive reconstruction remains unclear.

The licence contains no expiration date but can be revoked at any time by OFAC.