Sources: The United States and Venezuela are discussing easing sanctions, making little progress

Birds fly past the Venezuelan flag in Caracas, Venezuela, January 12, 2021. REUTERS/Manor Quintero

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  • Both sides made “extreme” demands – sources
  • The US delegation agreed to continue the meeting, without specifying a date

CARACAS/WASHINGTON (Reuters) – U.S. and Venezuelan officials have discussed the possibility of easing oil sanctions on Venezuela, but made little progress toward a deal in the first high-level bilateral talks in years, five sources familiar with the matter said. Washington seeks to separate Russia from one of its main allies.

Both sides took advantage of Saturday’s meeting in Caracas to present what one source described as “extremist” demands, reflecting the long-running tensions between the major power in the Western Hemisphere and one of its biggest ideological rivals.

The sources said that a US delegation headed by Juan Gonzalez – the White House’s chief adviser for Latin America – and Ambassador James Storey held talks at Miraflores Palace with Socialist President Nicolas Maduro and his deputy Delcy Rodriguez.

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Roger Carstens, the special presidential envoy for hostage affairs, was also a member of the US group and made the case to the government of Venezuela for the release of US citizens and dual nationals held there, including six Citgo executives, according to a person familiar with the matter. Subject.

A source in Washington said US officials viewed the meeting as an opportunity to assess whether Venezuela, one of Russia’s closest allies in Latin America, was willing to distance itself from President Vladimir Putin over his invasion of Ukraine.

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Washington also wants to identify alternative oil supplies to fill the gap if it seeks to boycott Moscow’s energy industry. Venezuela may boost crude exports if Washington eases sanctions.

The White House, the US State Department and Venezuela’s Ministry of Information declined to comment.

The willingness of the United States to re-engage after years of renouncing such contact seemed to be a boost for Maduro.

The meeting came as Venezuela’s financial lifeline teeters to Russia under sanctions imposed on Moscow in the wake of its military attack on Ukraine, which Russia called a “special operation.” Caracas used the talks to press for relief from US sanctions.

Two separate sources said that Venezuela has asked Russia in recent days to unfreeze oil revenues at several Russian banks blacklisted by the United States, especially Promsviaz Bank (PSB), where the Venezuelan state oil company PDVSA and the Defense Ministry hold bank accounts.

In 2019, as part of US sanctions on Venezuela, another bank widely used in trade with Russia, Evrofinance Mosnarbank, was blacklisted, forcing PDVSA to transfer its collection accounts to other banks.

Three people familiar with the matter said that in the talks, Washington sought guarantees of free presidential elections, sweeping reforms of Venezuela’s oil industry to facilitate production and exports by foreign companies, and public condemnation of the government’s invasion of Ukraine, which Maduro defended.

One of the sources said US officials were willing to consider allowing Venezuela to use the SWIFT system, which facilitates financial transactions between banks around the world, to transfer funds to other accounts, as a concession, to temporarily consider allowing Venezuela to use the SWIFT system.

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Sources said Maduro has sought a complete lifting of sanctions banning Venezuelan oil exports, a lifting of sanctions against him and other Venezuelan officials, and the return of state control over US PDVSA’s subsidiary Citgo Petroleum.

Relief of oil sanctions could start by allowing companies including US company Chevron (CVX.N)ONGC in India (ONGC.NS) And the Europeans Eni, Repsol (REP.MC) and Maurel & Prom (MAUP.PA) Trading in Venezuelan oil shipments. Those companies submitted separate requests to the Biden administration, but no decisions were made.

“Worried about easing sanctions”?

Two of the sources said that even if Washington does not respond to Maduro’s demands, he may use the US meeting to pressure Russia to allow Venezuelan money to continue flowing.

“Yes, Maduro is eager for sanctions relief. No, he is not interested in changing alliances. This is tactical,” Eric Farnsworth, head of the Washington Bureau of the Council of the Americas, said Saturday on Twitter. (The United States) should be clear on this, not be naive.”

Two sources said the Caracas meeting was at the request of the Maduro government through the multinational law firm Denton, which other government entities have previously used in debt negotiations.

A Denton representative in Caracas did not immediately respond to a request for comment.

The sources said that US officials had agreed to a follow-up meeting, but no date had been set.

Aides to Venezuelan opposition leader Juan Guaido were only notified of the meeting on Saturday morning. The United States and dozens of other countries recognized Guaido as Venezuela’s legitimate leader after they rejected Maduro’s 2018 re-election as a fake, but many countries have since renounced their recognition.

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In the meeting, US officials reiterated their demand for the release of six former Citgo executives imprisoned in Venezuela and other detained US citizens, but they did not offer any kind of trade-off with businessman Alex Saab, a key Maduro ally who is being held in the US. Saab’s release was a key demand for Maduro to return to talks with the opposition.

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Additional reporting by Mariana Baraga in Houston, Vivian Sequera in Caracas, Matt Spitalnick and Brian Ellsworth in Washington and Diego Orr in Mexico City; Editing by Daniel Flynn and Stephen Coates

Our criteria: Thomson Reuters Trust Principles.

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