A Repsol logo is seen in front of Torre Espacio building in Madrid April 13, 2012.
A Repsol logo is seen in front of Torre Espacio building in Madrid April 13, 2012.

MADRID, SPAIN - Spain's Repsol, the last western oil giant with major operations in Venezuela, is leaving the embattled country, as pressure mounts from U.S. sanctions and continuing unrest.

Repsol's investments in Venezuela, valued at nearly $1.7 billion (1,480 billion euros) in 2017, have fallen 70% over the past year.  The company's annual report also says the firm will continue winding down its Venezuelan business in the next few months.

Repsol has been the subject of intense negotiations between Spain and Washington as the Trump administration tries to get Madrid's socialist government to join efforts to isolate President Nicolas Maduro.

Spanish oil companies are maintaining "certain activity" (in Venezuela) which can "pose a problem" with U.S. sanctions according to Spanish Foreign Minister Josep Borrel.  He spoke after a meeting with U.S. secretary of state Mike Pompeo in Washington last month.

U.S. Secretary of State Mike Pompeo is seen at the
U.S. Secretary of State Mike Pompeo is seen at the Department of State in Washington, May 9, 2019.

Pompeo asked Spain to "apply all possible financial and political pressures" on the Maduro regime according to Borrel,  who said that Spain would act within the framework of the European Union.  EU foreign ministers decided not to impose sanctions on Venezuela at a recent meeting in Brussels. 

Meantime, Repsol is negotiating the reduction of its Venezuelan business interests with the State Department, according to U.S. diplomatic sources.

U.S. special envoy for Venezuela Eliot Abrams recently said during a visit Madrid, that "Repsol's business in Venezuela is under very active discussion in Washington" where the company applied for special exemptions for its remaining joint ventures with the Venezuela's national oil company PDVSA.

"There will be decisions made in Washington in the coming days about this," Abrams said.

Repsol has consistently adapted to the socialist policies of the left-wing populist government abandoned by other oil giants like Exxon Mobil and BP.  It was one of the few companies to remain in Bolivia when president Evo Morales, a close ally of Maduro, forced foreign firms to accept majority state ownership in energy projects.

Repsol has also explored for offshore oil in Cuba.

Repsol executives have denied that U.S. pressure is forcing it out of Venezuela. But the Trump administration's actions are increasingly blocking the company's ability to conduct business with Venezuela's national oil company PDVSA. 

Russia conducts oil business in Venezuela through an affiliate that PDVSA recently opened in Moscow. The Russian company Rosneft owned by a close friend of premier Vladimir Putin has increasingly assumed control of Venezuela's diminishing oil production. 

People reacts as they wave a Venezuelan flag durin
People reacts as they wave a Venezuelan flag during a protest in support of Venezuelan opposition leader Juan Guaido at Colon Square in Madrid, Spain, May 1, 2019.

Some of Repsol's oil contracts with the Venezuelan government run until 2036. The company has a 40% stake in four oil blocks under a joint venture company, as well as majority stakes in gas projects. 

The firm has been trying to get around U.S. sanctions by bartering shipments of Venezuelan crude for refined fuel sent back to Venezuela.

But this swap system is now endangered by a new U.S. Energy Department directive that authorizes officials to confiscate oil tankers and freeze assets of companies moving Venezuelan oil.

According to the Reuter news agency, Europe-bound tankers loading crude at Venezuelan ports have been paralyzed in port.

Washington has given Repsol a grace period to wind down its Venezuelan operations in an orderly way according to company spokesmen.

There are also growing legal pressures on Spanish individuals involved in Venezuela's oil business. Spain's ambassador to Venezuela under former socialist prime minister Rodriguez Zapatero, Raul Morodo, is being investigated for laundering money through false contracts with PDVSA. Three people including his son were arrested this week on orders from Spain's highest court.