Govt seeks advice on sanctions

GOVERNMENT is not making any premature conclusions about the United States’ decision to impose sanctions against Venezuelan state energy company PDVSA. The sanctions were announced yesterday by US National Security Adviser John Bolton and US Treasury Secretary Michael Mnuchin at a news conference at the White House.

But Communications Minister Stuart Young steered clear of speculating about this development and whether it could have any impact on the Dragon gas deal.

Young said, “We would need to see the US sanctions and seek advice on same before commenting, if at all on its effects.”

Energy expert Anthony Paul said it would be difficult at this time to determine whether the sanctions could have any impact on Dragon or on TT. Paul said in the past, these kinds of sanctions were used to prevent remittances from going back to Venezuela.

Mnuchin said the proceeds of the purchase of Venezuelan oil would now be withheld from President Nicolas Maduro’s government.

He said PVDSA could avoid sanctions by recognising Venezuelan National Assembly president Juan Guaido as the country’s interim president.

Bolton and Mnuchin said the sanctions were intended to prevent Maduro’s government from taking funds from PVDSA. Mnuchin said PDVSA has been used as a vehicle for embezzlement and corruption by Maduro and his allies.

He said the Office of Foreign Assets Control (OFAC) issued general licenses that authorise certain transactions activities with PDVSA for limited periods of time.

Refineries in the US are taking steps to reduce their reliance on Venezuelan oil.

Mnuchin said OFAC has also issued general licenses to ensure certain European and Caribbean countries “can make an orderly transition.”

The US action blocks all PDVSA property and interests subject to US jurisdiction, and prohibits US citizens from engaging in transactions with them. Speaking in the House of Representatives last week, Energy Minister Franklin Khan said the first gas from the Dragon field in Venezuela is expected in 2021. Khan said a heads of agreement was executed on December 5, 2016 and a term sheet signed on August 25, 2018. The Prime Minister and Maduro signed the latter document in Caracas. Khan said other elements of the project were in train with a completion time frame of between 12 to 18 months.

Khan said the last major agreement to be signed is the gas sales agreement.