The Trump administration will grant Chevron the right to keep its operations in Venezuela after its sanction waiver expires in June, Reuters and the Wall Street Journal reported separately, citing unnamed sources.
According to the sources, Chevron would be able to retain its assets in Venezuela, but would not be able to export oil from the country to the United States. The WSJ wrote that this would reduce the risk of the Venezuelan state seizing the assets while giving Chevron the opportunity to go back to normal operations in case bilateral relations between Caracas and Washington ever improve. Besides the ban on exports, Chevron also cannot operate the assets or expand them, Reuters noted in its report.
The Trump admin in March gave Chevron a 30-day notice to wrap its business in Venezuela and leave, threatening to disrupt the supply of heavy crude for Gulf Coast refineries. The decision initially affected Venezuelan crude oil exports, of which 240,000 barrels daily was going to Gulf Coast refineries.
The government realised this somewhat belatedly and granted Chevron a 60-day extension of the sanction waiver so it could continue producing oil in Venezuela and shipping it to U.S. refiners. Chevron has come to account for a fifth of Venezuela’s oil output. The company had plans to boost output at one of its joint ventures with PDVSA, Petropiar, by as much as 50% this year, to 143,000 barrels daily. Now, this is unlikely to happen due to the restrictions in its license to keep control of its Venezuela assets.
Essentially, Chevron will return to its position from the first Trump presidency, when the president showered Venezuela with the original sanctions, which prompted a sort of temporary freeze on supermajor operations in the country. Then the Biden administration gave Chevron a license to operate in Venezuela in 2022.
By Irina Slav for Oilprice.com
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