Venezuelan people in a street protest with banners of CITGO and PDVSA. Photo: Bloomberg.
Venezuelan Vice Minister for Anti-Blockade Policies William Castillo explained that as a consequence of the decisions announced by the United States Department of the Treasury regarding sanctions against Venezuelan Oil, the auction of the Venezuelan company CITGO planned for 2024 has been prevented.
Castillo said to Ăltimas Noticias this Thursday, October 19, that the decision extends the prohibition on the sale of PDVSA bonds that are tied to CITGO.
âThat is very important because it has implications for the auction. While it is in force, and is extended until January, the CITGO auction cannot be held,â he added.
Castillo also spoke about the United States’ decision to unblock transactions related to the provision of financing and other transactions with bonds, which he classified as âvery importantâ because it allows Venezuelan bonds to be traded in secondary markets.
âThat is also important for the recovery of Venezuela’s credit,â he said.
Investments
Regarding the cessation of some coercive measures against the Venezuelan oil and gas sector, the decision opens the doors to new investments and the expansion of some that already exist.
In addition, the United States lifted the blockade on the Central Bank of Venezuela and the Bank of Venezuela, allowing these institutions to function as operators and financial intermediaries for oil and gas industry operations.
âIt allows payment of services, payment of debts, payment of debts with oil. âIt restores in part, but not all, the economic rights of PDVSA and its ability to make international alliances to produce oil, increase production and therefore increase income for the country and the national budget,â he added.
In this area, stands out that Trinidad and Tobago can make payments in foreign currency to Venezuela for the development of the gas project in the Dragon Field, located in the east of Venezuela.
âThe United States had given a license for that project but it could not be paid in foreign currency and now it is authorizing it,â he said.
The vice minister also referred to the decision that involves the marketing of gold by Minerven and the operation of the Venezuelan Corporation of Guayana (CVG).
Vuelta a la Patria plan
Castillo also informed that the opening given by Washington to Conviasa to carry out operations aimed at repatriating Venezuelans through the Vuelta a la Patria plan, applies to flights on this continent, except to the United States.
âWe will be able to bring Venezuelans without problems of being denied a permit, being able to buy fuel, being able to hire different services for these operations, as long as they are within the framework of the Plan Vuelta a la Patria,â said Castillo.
He highlighted that these actions by Washington must be extended progressively until the objective set by the Venezuelan government of zero sanctions is achieved.
He recalled that the relaxation of sanctions is the result of the signing, on Tuesday, in Barbados, of partial agreements between the government and a sector of the opposition. President Maduro has state several times in the last months that in order to achieve “free and fair” elections, the country has to be “free of sanctions.”
PDVSA bonds on the rise
After hearing the news about the OFAC licenses, international markets began to react and view the bonds of the country’s main industry with more optimism.
The president of Venezuela’s biggest business association, FedecĂĄmaras, AdĂĄn CĂ©lis, said this the flexibility led to an increase between 7% and 10% in financial instruments that were at 2%. âWe have to see how we can accelerate the country’s progress,â he said.
However, this Thursday crude oil prices dropped. A barrel of North Sea Brent for delivery in December fell 2.01%, to $89.65. For its part, the West Texas Intermediate (WTI) indicator for delivery in November fell 1.87% and was trading at $86.67 per barrel.
This was a natural market response to the announcement about US sanctions on Venezuela’s oil production, but experts argue that international current developments and oil market fundamentals points towards an increase in oil prices in the near future.
(Ăltimas Noticias) by Victor Lara, with Orinoco Tribune content
Translation: Orinoco Tribune
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