Nearly half the oil rigs operating in Venezuela will shut down by Oct. 25 if the Trump administration does not extend a 90-day waiver from its sanctions, Bloomberg reports.
Venezuela had 23 oil rigs drilling in July, down from 49 just two years ago, with 10 exposed to U.S. sanctions, according to the report.
A departure of U.S. oil service providers would hurt projects in Venezuela's Orinoco region, where operators need to constantly drill wells just to keep production from declining, and are involved in state-controlled PDVSA's joint ventures in other regions such as Lake Maracaibo.
Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB) and Weatherford (OTCPK:WFTIQ) - which have written down at least $1.4B combined since 2018 in charges related to Venezuela - reportedly have reduced staff and are limiting their exposure to the risk of non-payment in the country.
Nabors Industries (NYSE:NBR) has said it has three drilling rigs in Venezuela that can operate until October.
Meanwhile, Russia's Rosneft (OTCPK:RNFTF) has become the top trader of Venezuelan crude, Reuters reports, shipping oil to buyers in China and India and helping offset the loss of traditional dealers who are avoiding it for fear of breaching sanctions.
Rosneft, which used to resell volumes it bought from PDVSA to trading firms and was less involved in marketing, reportedly is now taking care of shipping and marketing operations for the bulk of Venezuelan oil exports, ensuring PDVSA can continue to supply buyers.