OFAC Issues Venezuela General License 8G Extending Authorization Of Certain Transactions For U.S. Oil & Gas Companies

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The U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License 8G (“GL 8G”), which authorizes five (5) U.S. oil and gas companies to engage in transactions “ordinarily incident and necessary to the limited maintenance of essential operations, contracts or other agreements”, as well as transactions necessary to the wind down of operations in Venezuela involving Petroleos de Venezuela, S.A. (“PdVSA”) or any entity which PdVSA owns a 50% or greater interest and that were in effect prior to July 26, 2019. Effective November 17, 2020, GL 8G replaces and supersedes GL 8F which was set to expire on December 1, 2020, effectively extending its deadline through 12:01 eastern daylight time on June 3, 2021. GL 8G applies specifically to the following entities and their subsidiaries: Chevron Corporation, Halliburton, Schlumberger Ltd., Baker Hughes (a GE company), and Weatherford International, PLC.

Notably, GL 8G does not authorize the drilling, lifting, processing of, purchase or sale of, or transport or shipping of any Venezuelan-origin petroleum or petroleum products. It does not authorize the provision or receipt of insurance for such transactions/activities, or any work on oil wells or other infrastructure for the provision of goods or services. The GL also does not authorize the payment of a dividend, the provision of any loans to PdVSA, or any other transaction/activity otherwise prohibited by the Venezuela Sanctions Regulations (“VSR”).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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