PDVSA partners fear reach of latest U.S. sanctions on Venezuela
Foreign joint venture partners with Venezuelan state-owned oil company PDVSA are concerned the latest set of U.S. sanctions on the South American country could disrupt their operations, three industry sources said, Rueters reports.
The Trump administration last week froze all Venezuelan government assets in the United States and U.S. officials ratcheted up threats against companies that do business with Venezuela. That has raised fears for those companies that the United States will make good on threats to sanction individual firms, and also that banks will limit transactions just to avoid the risk of sanctions as well, the sources said.
The White House imposed sanctions on Venezuela’s oil industry in January in an effort to oust socialist President Nicolas Maduro, whose re-election in 2018 is viewed by much of the Western Hemisphere as illegitimate. The executive order issued on Aug. 5 did not explicitly sanction non-U.S. companies that do business with PDVSA, including partners in crude operations like France’s Total SA, Norway’s Equinor ASA and Spain’s Repsol SA, as well as Russian and Chinese customers.
However, the order threatens to freeze U.S. assets of any person or company determined to have “materially assisted” the Venezuelan government. Similar language was included in sanctions in January, but U.S. national security adviser John Bolton said last week that the newest measures mean companies have a choice between doing business with Venezuela or the United States. “If they really want to do what Bolton says that he wants to do, which is to get these firms to stop doing business with Venezuela, they’re going to show that they mean it, they’re going to have to punish somebody,” said Francisco Rodriguez, a Venezuelan economist at Torino Economics in New York and former advisor to opposition presidential candidate Henri Falcon.
Total and Repsol did not respond to requests for comment.