U.S. prepared to authorize Chevron to boost Venezuela’s oil output

Chevron Corp.

The US license for Chevron to help rebuild the country’s sagging oil is one of the biggest plums for bringing the negotiations between the Venezuelan government and its opposition.

US officials this year sought to return to talks between socialist President Nicolas Maduro and the country’s opposition by offering a slight reduction in sanctions and freeing some Venezuelans. in an American prison.

Both Venezuelan and US officials are pushing for talks in Mexico City this weekend, the people said, for the first time since October 2021. Maduro has been rewarded this year with the first led to new leftist elections in Brazil and Colombia and the opposition weakened support.

Chevron declined to comment on the pending agreement or terms. Oil Company No. 2 The US remains in compliance with the terms of its existing license, the spokesperson said. The license to supervise the operation expires on December 1.

IMPORTANT WORDS

The terms proposed for the deal would prevent Venezuela’s state oil company PDVSA from receiving revenue from Chevron’s oil sales. And they will cut “the use of shady companies that control the flow of Venezuela’s oil to countries like China,” said a person familiar with the matter in Washington.

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White House officials aim to “change the sale of oil from illegal and non-transparent channels to transparent, legal ones,” the person said. The United States could withdraw the concession if Maduro’s administration fails to negotiate in good faith or uphold its promises, the person said.

“We have long expressed our interest in providing aid plans as important steps that reduce the suffering of the Venezuelan people and bring them closer to the restoration of freedom,” a spokesman for the US State Department said.

US President Joe Biden has reason to give Chevron a wider operating license with US shale production slowing, Russia’s oil exports falling amid sanctions and Saudi Arabia hinting at cuts out of OPEC.

The United States this year kept oil prices from rising by releasing more than 200 million barrels of the country’s oil in an emergency. But these ads will end soon.

PRE-SANCTIONS OUTPUT

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The Biden administration has announced the easing of Venezuela sanctions, including giving Chevron a general license to rehabilitate oil and restore business rights in Venezuela, will come only if both sides progress in political discourse.

The U.S. Treasury may issue new permits on Monday or Tuesday. The expansion may not be a response to energy price concerns, but reflects a desire “to promote the return of democracy in Venezuela,” one of the people said.

Chevron is a partner with PDVSA in several oil joint ventures that pump and process crude oil for export. Together, the industries were producing about 200,000 barrels per day (bpd) before US sanctions and the lack of funding cut their profits.

PDVSA did not respond to a request for comment on the negotiations.

After oil sanctions on Venezuela in 2019, Chevron received an exemption to exchange its Venezuelan oil to recover millions of dollars in outstanding debts. These laws were suspended by President Donald Trump a year later as part of his “high-level” strategy to oust Maduro, whose 2018 re-election was not recognized by the West. .

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The United States this year began to consider Chevron’s request to expand operations with greater urgency as Washington sought oil to replace supplies from sanctions on Russia as well as OPEC’s decision to cut .

MOUNTING CARS

In recent weeks, Maduro’s representatives and opponents met in Paris under the support of the presidents of France, Colombia and Argentina to break the political deadlock.

In Washington, Republicans and some of Biden’s fellow Democrats doubted Maduro was ready to negotiate in good faith and resisted easing sanctions unless he gave something in return.

A growing number of oil companies have left the partnership with PDVSA due to debt and job freezes. The shrinking position Chevron as the only strong partner left that can restore production, set to fall this year to 650,000 bpd, below the target of 2 million bpd.

Venezuela holds about 300 billion barrels of oil reserves, the world’s largest, but has not been able to hit its production targets due to underinvestment, poor maintenance, lack of equipment and US sanctions.
Source: Reuters



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