US Eases Venezuela Sanctions in New 25-Year Oil Framework
A new 25-year oil agreement between the U.S. and Venezuela, contemplating $100 billion in private investment, is underpinned by amended OFAC general licenses that remove U.S. choice-of-law requirements for authorized contracts.
The United States and Venezuela have announced a landmark 25-year oil agreement, signaling a potential reopening of the country's energy sector to an estimated $100 billion in private investment. In a key supporting move, the U.S. Treasury's Office of Foreign Assets Control (OFAC) amended several Venezuela-related general licenses, effective August 27, 2026. Sophisticated counsel should advise clients that the most significant legal change removes the prior requirement for authorized contracts with Petróleos de Venezuela, S.A. (PDVSA) and other state entities to be governed by U.S. law. This provides greater flexibility in contract structuring, but does not eliminate risk. The amendments retain a crucial guardrail: any dispute resolution must still be seated in the U.S., U.K., France, or Singapore. While this development creates substantial opportunities, it demands a holistic risk assessment. Companies evaluating market entry must scrutinize the final contractual architecture and fiscal terms while reinforcing diligence on anti-corruption, AML, export controls, and counterparty risks, as sanctions authorization alone does not ensure a transaction's commercial or legal viability.