US authorization of LPG exports to Venezuela of no impact: Observatory

By Al Mayadeen English
Source: Agencies
9 Jul 2024 09:12
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The Venezuelan Anti-Blockade Observatory says Caracas does not import liquefied gas and meets national demand through the production of the Venezuelan National Oil Company.

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A Venezuelan national flag strung from The Walk of the Heroes monument flutters in the wind before the start of an Independence Day military parade, in Caracas, Venezuela, Friday, July 5, 2024. (AP)

The US decision to authorize certain transactions involving the exportation or re-exportation of Liquefied Petroleum Gas (LPG) to Venezuela "has no impact," the Venezuelan Anti-Blockade Observatory pointed out on Tuesday.

In a statement, the Observatory emphasized that contrary to what one might think, the US Treasury Department's extension of "General License 40C" has no real effect on Venezuela because the country does not import liquefied gas and meets national demand through the production of the Venezuelan National Oil Company (PDVSA).

It affirmed that the national oil industry continues to progress in increasing fuel production, revealing that Venezuela plans to export liquefied gas in the future, but noted that "General License 40C" does not allow the state oil company PDVSA to export and limits its operations to the Venezuelan market.

The statement explained that the measure includes transactions and activities that may be prohibited under three executive orders by then-US President Donald Trump, which generally place restrictions on the trade of hydrocarbons to and from Venezuela.

The US Treasury Department on Monday authorized certain transactions involving the exportation or re-exportation of LPG to Venezuela, according to a notice published by the Office of Foreign Assets Control (OFAC).

The license comes a few days after Venezuela’s National Assembly Speaker, Jorge Rodriguez, announced that Caracas and Washington had held direct talks in a remote format and agreed to continue their dialogue to strengthen trust and improve relations.

"Except as provided in paragraph (b) of this general license, all transactions related to the exportation or reexportation, directly or indirectly, of liquefied petroleum gas to Venezuela, involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA) … are authorized through 12:01 a.m. eastern daylight time, July 8, 2025," OFAC said in a statement.

According to OFAC, the authorization does not allow for payment-in-kind of petroleum or petroleum products or any other transactions otherwise prohibited by the so-called Venezuela Sanctions Regulations.

The statement further noted that nothing in the newly issued authorization relieves individuals from compliance with the requirements of other federal agencies, including the Department of Commerce’s Bureau of Industry and Security.

Liquefied gas is primarily used for electricity generation, vehicle fuel, and industrial use in Venezuela.

Caracas is aiming to monetize its gas reserves, the largest in Latin America, to supplement its revenues from crude oil and fuel exports, which constitute the country's largest source of foreign currency income.

In October last year, Washington eased sanctions on Venezuela by issuing a six-month license allowing PDVSA to export crude oil and gas to markets of its choice to receive foreign investments and cash revenues.

However, in April 2024, the United States reinstated some sanctions on the Venezuelan oil and gas sector industry, citing election-related concerns in Venezuela.