USA Urges Exclusion of Repsol, Eni, and Maurel & Prom from Venezuela to Amplify Economic Coercion

Title: US Kicks European Companies Out of Venezuela's Oil Sector, Stirring Global Energy Market Tensions

April 1, 2025 (Our Website) - In a bold move that's creating ripples worldwide, the Donald Trump administration has yanked the permits of some foreign corporations operating in Venezuela's oil industry. Over the next few weeks, heavy hitters Repsol (Spain), Eni (Italy), and Maurel & Prom (France) must pack up and call it quits in the Caribbean nation.

Sources claim the US Treasury Department has given our trio of European friends until May 27 to wrap up and hightail it out. They're currently co- talents in joint ventures with Venezuela's state oil company, PDVSA, that churn out a combined 83,000 barrels of oil a day - a hefty 10% of Venezuela's current production, according to Orinoco Research.

The White House's decision to boot' em out comes shortly after Chevron lost its permit to extract and export crude from its Venezuelan projects. The US oil titan was initially granted an April 3 deadline, later extended to May 27 for one last cha- cha with Caracas.

The Trump Administration initially granted licenses and "comfort letters" to these multinational corporations to restart operations in Venezuela, departing from its "maximum pressure" sanctions policy during the first term. But with President Trump à la mode, it seems foreign investments in the oil industry remain under financial sanctions and an export embargo.

Although European businesses steer clear of primary sanctions because they're not under the US Treasury Department's jurisdiction, Washington has wagged its finger menacingly about secondary sanctions. This back-and-forth dance leaves multinationals clamoring for the "approval" before dipping their toes in Venezuela's oil sector.

In cranking up the heat on Venezuela's vital oil industry, the White House has set its sights on slapping "secondary tariffs" on countries importing Venezuelan oil. China, Venezuela's primary crude customer, barked back and urged the U.S. to keep its nose out of Venezuela's affairs.

Nicolás Maduro's government has vowed to keep on truckin' with its foreign partners and stick to existing contracts. The communique echoed Venezuela's call for foreign investment in its energy sector.

The Cards Remain in the European Game

Repsol and Eni each hold half the stakes in the offshore project Cardón IV, which feeds thermoelectric plants in western Venezuela and the domestic cooking gas distribution network. The Cardón IV project boasted a daily gas output of around 600 million cubic feet in 2023.

Although PDVSA doesn't own a majority stake, the Cardón IV project is still subject to primary sanctions. To avoid landing in the crosshairs of secondary sanctions, these companies would need US Treasury approval to receive payments from the Venezuelan state-owned firm for natural gas supplied. Nervily, Repsol CEO Josu Jon Imaz declared his company's intentions to maintain natural gas operations, representing a whopping 85% of its production in Venezuela.

In a statement, Eni pledged to obey international sanctions while also exploring options to keep gas in Venezuela's domestic market flowing. Maurel & Prom wound up announcing its plans to work with legal advisers and evaluate the implications of the revoked waiver. The company's shares took a nose-dive, shedding 15% on Monday, with Repsol and Eni taking a slight hit as well.

Edited by Cira Pascual Marquina from Caracas and José Luis Granados Ceja from Mexico City, Mexico.

Insights:

Contradictory Sanctions: European corporations operating in Venezuela risk landing in hot water due to the contradictory nature of United States sanctions. Although they're not directly under the US Treasury Department's jurisdiction, flinging themselves into secondary sanctions crossfire can lead to kneecapping economic repercussions.
European Diplomatic Responses: With European corporations feeling the heat, expect European nations to speak out in response. Countries like Spain and Italy, whose marquee corporations are now jostling to keep their Venezuela ventures humming, may create diplomatic ripples in dealings with the United States.
New Foreign Partnerships: As Venezuela faces growing pressure to cut ties with multinational corporations, future foreign investments could become more elusive. Down the road, Venezuela may look to buddies like China or Russia for aid to keep its oil sector afloat.
Global Energy Market Dynamics: The withdrawal of big-name corporations from Venezuela's oil sector has the capacity to disrupt the global energy market. A drop in Venezuela's oil production could aggravate supply and demand dynamics, especially if other geopolitical uncertainties flare up in major oil-producing regions.

The US revocation of permits for European companies operating in Venezuela's oil sector, such as Repsol, Eni, and Maurel & Prom, is causing a stir in the global energy market.
These companies, which contribute 10% of Venezuela's current oil production, must halt their joint ventures with PDVSA and leave the country by May 27.
The Trump Administration's decision to withdraw these licenses is a departure from its initial policy of granting comfort letters to foreign corporations.
However, it appears that foreign investments in the oil industry remain under financial sanctions and an export embargo, despite attempts to secure licenses.
European businesses, while not directly under the US Treasury Department's jurisdiction, are still subject to secondary sanctions, leaving them in a precarious position.
As a result, these companies are evaluating their options and seeking legal advice to avoid being caught in the crossfire of secondary sanctions, potentially leading to diplomatic responses from European nations and the development of new foreign partnerships.