US authorizes ConocoPhillips to recover Venezuelan assets

ConocoPhillips has received new US licenses that could help the company recover up to $10 billion owed by Venezuela, an anonymous source told Bloomberg. The debt stems from the Venezuelan government’s nationalization of ConocoPhillips assets more than a decade ago. The licenses allow the company to pursue its claims against Petroleos de Venezuela SA (PDVSA), the state-owned oil giant, without violating US sanctions.

While the licenses do not allow ConocoPhillips to resume operations in Venezuela, they allow the company to pursue legal action in countries where PDVSA holds financial assets. By securing these licenses, ConocoPhillips can move into the forefront of entities seeking to recover funds from Venezuela, ensuring it is in a strong position once PDVSA’s frozen accounts are released.

Last month, a Trinidad and Tobago court awarded ConocoPhillips $1.33 billion as part of its ongoing effort to recover lost assets. The Sept. 27 ruling approved Conoco’s request to seize payments PDVSA allegedly received for its role in the Dragon Gas offshore product. Conoco remains committed to using all legal channels to recover the full amount owed, emphasizing its debt to shareholders.

Venezuela, once a major global oil producer, has seen its output drop by more than 70 percent due to years of underinvestment in the sector, partly as a result of socialist policies and nationalization efforts. For ConocoPhillips, these US licenses mark a crucial step in addressing the financial fallout from its actions in Venezuela, although the company’s operations in the country remain halted.

As Venezuela’s oil industry continues to decline, any hope of recovery depends on securing foreign investment and technical expertise, much of which has been driven away by the country’s past actions.

By Julianne Geiger for Oilprice.com

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