US eases sanctions, allows oil firms to negotiate Venezuela contracts

The Trump administration conditionally removed longstanding prohibitions on oil and gas contract negotiations and operations in Venezuela, the latest steps in the US push to incentivize a revival of foreign investment in the South American country's struggling fossil fuel sector.

On Feb. 13, the US Treasury's Office of Foreign Assets Control simultaneously published General License 49 and General License 50. General License 49, "Authorizing Negotiations of and Entry Into Contingent Contracts for Certain Investment in Venezuela," allows companies to enter into negotiations and contingent contracts for new investment in Venezuela's oil sector -- including in early exploratory deals and potential joint ventures with state-owned oil company PDVSA -- provided the contracts are separately approved through OFAC before being signed, do not involve sanctioned vessels or persons, and do not include "a person located" in Russia, Iran, China, North Korea or Cuba.

General License 50, "Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela of Certain Entities," removes previous restrictions on operations in Venezuela following similar conditions. It also stipulates that any contracts with PDVSA are governed by the US, and that any payment to PDVSA is made into US-controlled accounts before being approved and distributed back to the Venezuelan government.

"These investments will lay the foundation for the modernization of the Venezuelan oil and gas industry, increase production, and shore up US supply lines in our own hemisphere," the US Department of State said in a press release. "These general licenses invite American and other aligned companies to play a constructive role in supporting economic recovery and responsible investment."

In the first visit by a US official to the country since the US Jan. 3 ouster of former President Nicolás Maduro, Wright and Venezuelan Interim President Delcy Rodgriguez visited Petro Independencia, a joint venture between Chevron (34%) and PDVSA in the Carabobo Block of the Orinoco Oil Belt in southern Venezuela, on Jan. 12. During a tour of the facility, Wright told reporters he foresaw a 30% to 40% increase in Venezuelan crude production in 2026.

"(The biggest hurdle) is just to get the political and economic arrangements as smooth as possible between our countries," Wright said in an interview with CNN. In a separate interview with Bloomberg TV, Wright said Chevron was most likely to expand output immediately, but that the removal of sanctions would give other companies the opportunity to explore existing projects and new development.

"Chevron is being enabled to massively grow their business here," Wright said. "They're the largest producer in Venezuela today, and they're going to be able to both expand the reserves they have and expand their operations. They're just one of many. But they're going to be a big one."

Venezuela's oil industry produced 3 million b/d in 2008, but was around 963,000 b/d in December 2025, just before Maduro was removed from power. PDVSA reported production of around 1.14 million b/d in January.

Venezuela's oil projects require a breakeven price of $64/b, among the highest in South America, but reforms under US oversight could lower costs to $45-50/b within the next few years, according to S&P Global Energy CERA's 2025 Cost of Oil Report.