The logo and trading information for Chevron is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 27, 2022. REUTERS/Brendan McDermid
Chevron confirmed Saturday that the U.S. Treasury Department had granted Chevron a new license with limited authorization to resume pumping oil from Venezuela.
The license was issued after a series of negotiations between representatives of Venezuela’s authoritarian president, Nicolás Maduro, and the Venezuelan opposition in Mexico on Saturday after a year-long stalemate. They reached a solution in which billions in government funds frozen abroad could be transferred to a humanitarian fund administered by the United Nations. Chevron was then given a 6-month license, which the U.S. may revoke at any time. Any profits from this deal will go to repaying the debt to Chevron and not the Maduro regime.
“GL 41 [license] authorizes activity related to Chevron’s joint ventures in Venezuela only and does not authorize other activity with PdVSA. Other Venezuela-related sanctions and restrictions imposed by the United States remain in place; the United States will vigorously enforce these sanctions and will continue to hold accountable any actor that engages in corruption, violates U.S. laws, or abuses human rights in Venezuela,” said Treasury Department said in a release.
The Treasury also said this decision reflects “longstanding U.S. policy to provide targeted sanctions relief based on concrete steps that alleviate the suffering of the Venezuelan people and support the restoration of democracy.”
The Chevron deal would allow the company to expand operations at a few projects it already runs with Venezuela’s state oil company, PDVSA, and the ability to import Venezuelan oil to the United States amid rising gas prices.
Venezuela has 304 billion barrels of proven oil reserves, the largest proven oil reserves of any nation, according to the BP Review of World Energy 2020. But the country has struggled to take advantage of the reserves due to U.S. sanctions and a lack of funds to invest in production.
After U.S. sanctions halted all drilling activities almost three years ago, the Biden administration is taking steps to ease tensions between the American and Venezuelan governments.
Chevron said in a statement that the Treasury’s move “brings added transparency to the Venezuelan oil sector.” The company also added that the decision “means Chevron can now commercialize the oil that is currently being produced from the company’s Joint Venture assets. We are determined to remain a constructive presence in the country and to continue supporting social investment programs aimed at providing humanitarian relief.”
A senior Biden administration official described Saturday’s Chevron deal as “important steps in the right direction” but that there was still “a long way” to go in resolving Venezuela’s complex economic, political and humanitarian crisis.
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