The US President Joe Biden’s administration has issued a licence authorising Chevron to resume limited oil extraction operations in Venezuela.
The licence, issued on Saturday, restricts Petroleos de Venezuela (PdVSA) from profiting from oil sales from American energy company Chevron. The permit enables Chevron’s joint ventures to operate in Venezuela and does not authorise any other engagement with PdVSA. Other sanctions and restrictions imposed by the US on Venezuela remain in effect.
According to a General Licence 41 from the US Department of Treasury (USDT), Chevron secured six-month permission from the US Office of Foreign Assets Control (OFAC). This permits the firm to produce crude oil and petroleum products in its projects in Venezuela. The business can maintain and repair oil fields there even though no new drilling is permitted.
“OFAC’s decision brings added transparency to the Venezuelan oil sector. The issuance of General Licence No. 41 means Chevron can now commercialise the oil that is currently being produced from the company’s joint venture assets,” a Chevron representative told Bloomberg News.
The Trump administration imposed sanctions against Venezuelan President Nicolás Maduro Moros in 2019 for stealing Venezuela’s assets and natural resources. Chevron was at this time only permitted to keep its assets in Venezuela and not to export crude or expand operations.
According to a senior US administration official who briefed reporters on Saturday, the six-month licence will be open to changes if “the Maduro regime fails to negotiate in good faith or follow its commitments.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“Allowing Chevron to begin to lift oil from Venezuela is not something that is going to impact international oil prices. This is really about Venezuela and the Venezuelan process,” the official said, adding that the US “[supports] a peaceful, negotiated resolution to the political, humanitarian, and economic crisis”.
The decision to authorise Chevron to resume shipments from South America comes ahead of a 5 December deadline for increased sanctions on Russia. According to Politico news, the G-7 and the European Union have considered restricting Russian petroleum exports and imposing a price cap on petroleum sales.