Spain’s Repsol Awarded US License to Operate in Venezuela

(Bloomberg) -- Spanish driller Repsol SA obtained a license from the US on Wednesday to keep operating in Venezuela after May 31, according to people with knowledge of the matter.

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Oil firms that want to stay in Venezuela have been applying for permits from US Treasury after Washington reimposed sanctions last month.

Repsol recently signed a deal with state-owned Petroleos de Venezuela SA that adds jointly managed fields to its operations. In the next few months the assets are expected to produce 20,000 barrels a day, doubling what the European major currently produces in one of its three ventures, Chief Executive Officer Josu Jon Imaz said in a call with investors in April.

A press official for US Treasury declined to comment.

The US is trying to use sanctions as leverage to ensure fairer presidential elections in July. Last year, Washington temporarily removed restrictions on Venezuela’s gold and oil sectors after the government of President Nicolás Maduro and the opposition signed a deal in Barbados on electoral guarantees.

After decades of mismanagement in its state-owned companies, ultimately hit by US sanctions, Maduro’s government has given oil majors more operational control in their local joint ventures. Repsol currently has three joint ventures with PDVSA, one of them alongside Italy’s Eni SpA.

The Spanish driller has also been among the foreign oil companies delivering a string of fuel and refined products to PDVSA, helping ease years of painful gasoline shortages.

--With assistance from Fabiola Zerpa.

(Updates with response from US Treasury in the 4th paragraph.)

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