New OFAC General Licenses set the stage for renewed US and international engagement in Venezuela’s energy sector

First, GL 46 reopens Venezuela’s oil sector to authorized companies trading in Venezuelan-origin oil, subject to certain limitations. 

Specifically, “US-established” companies may engage in transactions that are ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, provided that:

• Contracts with the Government of Venezuela (GoV), Petróleos de Venezuela, S.A. (PdVSA), or related entities in support of the above activities are governed by US law and any dispute resolution occurs in the United States; and
• Payments to the GoV, PdVSA, or related entities are placed in the recently created, US government-controlled Foreign Government Deposit Funds (FGDF) account or any other account as instructed by the US Department of the Treasury.

GL 46 does NOT authorize:

• “Non–commercially reasonable” payment terms, swaps of oil for debt, payments in gold, or payments in digital currency or tokens issued by or for the GoV;
• Transactions involving persons or entities in Russia, Iran, North Korea, Cuba, or entities they own or control;
• Transactions with entities in Venezuela or the US that are owned or controlled by persons in China;
• Unblocking of any previously blocked property; or
• Transactions involving blocked vessels.

If Venezuelan-origin oil is exported or supplied to destinations outside the United States, companies must submit by email detailed reports within ten days, and every 90 days thereafter if the transaction is ongoing. Information required in the reports include:

• Parties involved;
• Quantities, values, and destination countries;
• Dates of each transaction; and
• Any taxes, fees, or payments made to the GoV (to the FGDF account).

On the heels of GL 46, on February 3, OFAC issued GL 47 authorizing US-origin diluent supplies to Venezuela. Venezuela’s oil production is dominated by extra‑heavy crude from the Orinoco Belt, a resource so thick and asphalt‑like that it cannot flow, be transported, or be exported without adding lighter hydrocarbons known as diluents. The entire modern Venezuelan production system depends on reliable access to these inputs. 

GL 47 authorizes all transactions ordinarily incident and necessary to the exportation, reexportation, sale, resale, supply, storage, marketing, delivery, or transportation of US-origin diluents to Venezuela and involving the GoV, PdVSA, or related entities, provided that the contracts are governed by US law and any dispute resolution occurs in the United States.  

GL 47 retains some of the same restrictions found in GL 46, including the prohibition on payments involving debt swaps. GL 47 also prohibits non–commercially reasonable payment terms; payments in gold or in digital currency issued by or for the GoV; transactions involving persons located in or organized under the laws of Iran, North Korea, Cuba, or entities they own or control; the unblocking of any previously blocked property; and transactions involving blocked vessels.

Taken together, GLs 46 and 47 signal a cautiously expanding pathway for future international engagement in Venezuela’s energy and other sectors, suggesting that additional openings may emerge as regulatory conditions continue to evolve.

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If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.