On November 24, OFAC issued General License 8I, Authorizing Transactions Involving Petróleos de Venezuela, S.A. (“PdVSA”) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities (“GL 8I.”). GL 8I is available here.

GL 8I replaces and supersedes General License No. 8H (“GL 8H”), which was set to expire on December 1, 2021. GL 8I, like its predecessors, authorizes several U.S. energy companies to engage in limited activities necessary for the safety or maintenance of assets in Venezuela. GL 8I extends the expiration date of these activities to June 1, 2022.

In effect, extending GL 8 generally maintains the status quo for energy companies that have maintained a residual presence in Venezuela since the imposition of sanctions on PdVSA in January 2019. This appears to suggest the Biden Administration continues to deliberate regarding the course of U.S. sanctions policy toward Venezuela.

Overview of GL 8I

Like GL 8H, GL 8I continues to authorize certain transactions and activities for the following corporations: Chevron Corporation; Halliburton; Schlumberger Limited; Baker Hughes Holdings LLC; and Weatherford International, Public Limited Company (collectively, the “Covered Entities”).

In particular, with respect to the Covered Entities, GL 8I continues to authorize all transactions and activities ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that: (i) are for safety or the preservation of assets in Venezuela; (ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50% or greater interest; and (iii) were in effect prior to July 26, 2019.

GL 8I explains that transactions and activities that are “necessary for safety or the preservation of assets in Venezuela,” include:

  • Transactions and activities necessary to ensure the safety of personnel, or the integrity of operations and assets in Venezuela;
  • Participation in shareholder and board of directors meetings;
  • Making payments on third-party invoices for transactions and activities authorized by GL 8I or incurred prior to April 21, 2020, provided such activity was authorized at the time it occurred;
  • Payment of local taxes and purchase of utility services in Venezuela; and
  • Payment of salaries for employees and contractors in Venezuela.

Absent a General License or other authorization, these transactions would be prohibited by Executive Order (“E.O.”) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 C.F.R. part 591 (the “VSR”).

With respect to the Covered Entities, GL 8I also continues to authorize all transactions and activities that: (i) are ordinarily incident and necessary to the wind down of operations, contracts, or other agreements in Venezuela involving PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50% or greater interest, and (ii) were in effect prior to July 26, 2019. These transactions are authorized through June 1, 2022.