What’s on the Table for Venezuela’s Deal With the Opposition

Nicolle Yapur and Andreina Itriago Acosta
·3 min read
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(Bloomberg) -- Venezuelan officials are expected to announce a preliminary agreement Tuesday that could open the door for sanctions relief in exchange for basic electoral guarantees.

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After months of roadblocks, representatives for President Nicolás Maduro’s government and the US-backed opposition will sign a deal in Barbados later today, according to officials from Norway, which are facilitating the talks. Any significant concessions from Maduro, such as allowing banned opposition candidates to run in the 2024 presidential vote, could lead the US to ease crippling restrictions on Venezuela’s oil industry.

1. What should we expect today?

Probably a broad agreement without concrete details between top Maduro officials and opposition members belonging to the Unitary Platform. The terms will likely lead to more specific agreements once negotiations advance, and any move on the US-side will depend on concrete moves from the Maduro government.

On Monday evening, Maduro said his government was on the verge of signing a deal containing electoral guarantees and said he’d already signed a wider deal with US, without adding any details.

2. What’s the opposition asking for?

The opposition has been asking for fairer electoral conditions, which other than allowing all willing candidates to participate, also include concessions such as setting a definitive date for the vote.

Equal coverage in Venezuela’s highly censored media landscape is also among their requests, as well as inviting observers from at least five international organizations, especially the European Union, Carter Center and United Nations.

3. What could Maduro obtain in return?

The US could offer Maduro much needed relief on oil sanctions, which have prevented oil exports to the US — formerly its biggest buyer — since 2019. The limits have also prevented European and Asian oil majors from engaging with Venezuela so as not breach sanctions and thus be subject to significant penalties.

An expanded license could allow U.S. oil giant Chevron Corp. to boost oil production and other major foreign firms, such as Italy’s Eni Spa, Spain’s Repsol SA, France’s Maurel & Prom SA and China’s China National Petroleum Corp., to jump-start production.

Lifting sanctions against Venezuela’s state banks, such as Bandes and Venezuela’s central bank, could allow Maduro to retrieve at least $3 billion from overseas accounts.

4. Why now?

Venezuela is expected to hold primary elections on Sunday, where conservative candidate María Corina Machado is widely expected to win with about 86% of support from those highly likely to cast their ballots. Machado is banned from holding public office —alongside several other opposition leaders — and her potential victory would add significant pressure to Maduro to allow for her to participate.

On that note, Maduro is likely run for a third presidential term next year, and the easing of sanctions would allow him and his administration access to much-needed funds to rally support ahead of the vote.

Venezuela also stands to lose its most important foreign asset as the sale of state-owned Citgo Petroleum’s parent company is scheduled to start next week, with more than 20 creditors seeking to satisfy around $23 billion of claims against the country.

  • Oil edged lower on Monday following a rally last week on reports that the Biden administration is agreeing to ease Venezuela sanctions and with the US ramping up diplomatic efforts to contain the Israel-Hamas war from widening into a regional crisis

  • The opposition’s leading candidate, María Corina Machado, negotiated an obstacle course set up for her by the government earlier this month

  • After a lengthy legal battle, Citgo finally seems within Venezuela’s foreign creditors’ grasp with a court-ordered auction process set to begin this month

--With assistance from Fabiola Zerpa.

(Updates with comments from Maduro starting in the fourth paragraph)

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