Venezuela's oil ministry has suspended 19 oil production-sharing contracts that were signed during the administration of President Nicolas Maduro, four sources with direct knowledge of the situation said.
The suspension has not, to date, altered the country's oil and gas output, the sources added. While the agreements remain suspended, state oil company Petr leos de Venezuela S.A. (PDVSA) is selling the crude that is produced under those contracts.
Officials in Caracas and Washington are conducting a joint review of the production-sharing deals and the companies behind them. The review process could lead to recommendations to revoke some contracts, the sources said. As part of that scrutiny, both governments are examining the credentials of the firms that signed the agreements.
Sources described some of the contracting companies as little-known, and noted that several of the deals were concluded while Venezuela was subject to U.S. sanctions. In January, the United States captured authority over Venezuela's oil exports and sales, taking control of those flows and management of sales. Following that shift, the U.S. Treasury Department has issued licenses permitting certain companies to trade Venezuelan oil and to operate within Venezuela's oil and gas sectors.
In late January, Venezuela's National Assembly approved a reform to the country's hydrocarbon law intended to make the dilapidated oil industry more accessible to foreign investment. Under the amended law, the Venezuelan government has a six-month window to review existing contracts.
Requests for comment sent to Venezuela's oil ministry and to the White House did not receive immediate responses, the sources said.
Contextual note: The suspension covers 19 production-sharing contracts signed under the current administration. While described as suspended, production has continued and PDVSA has been selling oil produced under those deals. The procedural review by both governments and the six-month statutory review period under the revised hydrocarbon law are central to determining the future status of these contracts.