EXCLUSIVE-Venezuela's PDVSA selling oil only to individually licensed companies, sources say

By Arathy Somasekhar and Marianna Parraga

HOUSTON, Feb 13 (Reuters) - Venezuela's state-run oil company PDVSA has refused to sell oil to companies without individual U.S. licenses in the past two weeks, four sources from companies seeking to buy cargoes told Reuters, limiting exports and preventing the country from draining brimming storage tanks faster.

Washington last month granted both a general license that broadly permits oil exports, and individual licenses to traders Trafigura and Vitol to export oil worth billions of dollars. The permits followed a restricted U.S. license extended to Chevron CVX.N last year to export Venezuelan crude to the U.S.

Venezuela depends on oil export revenue and is in need of the sale proceeds to run its government. The general licenses are intended to exempt companies from U.S. sanctions on Venezuela's oil industry, which Washington has relaxed since capturing Venezuelan President Nicolas Maduro last month.

However, buyers of Venezuelan oil say that the general license has not facilitated trade as much as needed. The broad nature of the general license has left many conditions open to interpretation, raising questions about what is permitted and what is off limits, sources said.

PDVSA's executives require specific U.S. guidance on which companies to trade with and clearer trading terms so it can track cargoes and secure proceeds, they said.

U.S. banks have also been reluctant to finance Venezuelan oil trade transactions, three sources said, citing the complex nature of the licenses.

"Some banks may not want to risk processing under them, or may not feel the activity is authorized... banks may be doing more due diligence," one of the two sources said.

Banks' reluctance to fund Venezuelan oil trade for now will mean little for the world's biggest traders who have generated billions of dollars in profits in recent years and are awash with cash. However, it is likely to present complications for smaller players who decide to participate in the Venezuelan oil trade.

The White House told Reuters on Friday that the Trump administration has issued several general licenses at record speed due to the overwhelming interest from oil and gas companies to invest in Venezuela's energy infrastructure.

"The President's team is working around the clock to field requests from oil and gas companies," spokeswoman Taylor Rogers said. The U.S. Energy and Treasury Departments, as well as PDVSA did not immediately reply to requests for comments.

The Treasury Department's Office of Foreign Assets Control on Friday issued two additional general licenses allowing oil and gas producers to operate in Venezuela. The move, which will let Chevron CVX.N, BP BP.L, Eni ENI.MI, Shell SHEL.L and Repsol REP.MC - in addition to other companies - expand activities was the biggest relaxation of production-targeted sanctions yet.

QUESTIONS ANSWERED FOR NOW

In a frequently-asked-questions release posted last week, the Treasury said oil sale transactions must follow commercially reasonable terms, or those "consistent with prevailing market and industry standards."

It also said that "a financial institution may rely on the statements of its customer that the transaction is consistent with the terms of (license) 46, unless it knows or has reason to know otherwise." It did not elaborate further.

Some potential buyers, meanwhile, are also waiting for internal compliance clearances before engaging with PDVSA, sources said, as terms are clarified by the Treasury over time and as legal teams study them.

The general licenses for oil sales and trading currently do not allow for the negotiation of debt repayment with oil cargoes as previous authorizations did. This poses a challenge for many PDVSA partners, whose main immediate goal is to recoup millions of dollars they are owed.

According to PDVSA's export schedules updated this week, Vitol, Trafigura and Chevron continue lifting the lion's share of Venezuela's oil exports, despite multiple meetings between the state company and other companies, including refiners in the U.S. and elsewhere, to negotiate direct purchases.

Venezuelan oil exports rose to some 800,000 barrels per day in January from 498,000 bpd in December, shipping data showed. Levels remain below last year's average, however, which has prevented a massive drain of accumulated stocks.

Traders are likely to resell Venezuelan oil to Europe and Asia as refiners along the U.S. Gulf Coast are struggling to absorb the rapid surge in Venezuelan crude shipments after millions of Venezuelan barrels were diverted away from China over the last two months.