The United States government recently gave energy giants BP and Shell clearance to operate in South America’s Venezuela.
The two companies, both of which hold ownership in the lubricant brands Castrol and Shell Lubricants respectively, received new licences issued by the Department of the Treasury, letting them continue with much-delayed projects initiated in the region.
BP and Shell were among five oil companies operating globally that were granted approval by the Treasury. Clearance was provided via general licences that let the specified firms resume their gas and oil operations in Venezuela according to clearly outlined financial and legal terms.
Shell currently holds a vested interest in the offshore Dragon gas field of Venezuela, while BP’s interest is in a gas field that crosses the borders of Trinidad and Tobago and Venezuela, called “Manakin-Cocuina”. Trinidad and Tobago Prime Minister, Kamla Persad-Bissessar, has welcomed the recent development, stating the licences are an opportunity to deepen energy cooperation in the region and fortify commercial ties.
General Licence 49 lets international companies enter contracts with Venezuelan state-run oil company, Petróleos de Venezuela, to negotiate fresh investments in Venezuelan gas and oil, with the proviso that the performance of such contracts remains subject to independent approval from the Treasury.
The second authorisation, General Licence 50, empowers global energy companies like Chevron (US), Repsol (Spain), Eni (Italy), BP (UK) and Shell (UK) to resume gas and oil operations in Venezuela under clearly defined conditions; however, the recent authorisations do not allow transactions with individuals or companies controlled by or located in Russia, China or Iran.
