Washington: The US Treasury Department announced an extension of legal protections for bond transactions involving the Venezuelan state oil company, Petroleos de Venezuela, S.A. (PDVSA), until November 5. This move comes through an amended sanctions license issued on Wednesday, aiming to shield these transactions from the implications of existing sanctions.

According to Anadolu Agency, this updated directive from the Office of Foreign Assets Control (OFAC) allows all transactions related to the PDVSA 2020 8.5 Percent Bond that would typically be prohibited under the Venezuela Sanctions Regulations. The amendment effectively replaces the previous license from August 3, which restricted creditors from making claims or liquidating collateral tied to the defaulted bonds until the new deadline in November.

The extension serves to protect the foreign assets of the Venezuelan state energy company, notably its 50.1% equity stake in the US-based refining subsidiary, Citgo Holding, Inc., pledged as collateral for the debt. This measure is part of Washington's ongoing management of its political and economic relations with Caracas, particularly following significant diplomatic changes.

These developments occur in the wake of a US military operation on January 3, where Venezuelan President Nicolas Maduro was captured and brought to the US to face federal charges. In response, Washington acknowledged an interim government led by Delcy Rodriguez. Further, relations evolved with an August announcement by US President Donald Trump regarding an energy agreement. The deal allowed the North American Blue Energy Partners consortium to gain concessions in 17 Venezuelan oil fields, which hold an estimated 65 billion barrels of proven crude reserves.

The Treasury Department has also clarified that the new general license does not authorize any other activities that remain prohibited under broader federal sanctions regulations.