(S&P Global Platts) The US Treasury said on Tuesday that Chevron and top oilfield services firms can remain in Venezuela until June, extending a wind-down deadline that was set to expire on December 1.
The move effectively punts the decision on Chevron’s oil and gas operations in heavily sanctioned Venezuela to the administration of President-elect Joe Biden, who could choose to charter a more lenient path in negotiations with the struggling nation.
Chevron had previously been granted what was considered a final extension only through November by the US Department of the Treasury as part of the Trump administration’s efforts to increase political and economic pressure on the Nicolás Maduro regime in Venezuela.
The new move by the Treasury’s Office of Foreign Assets Control allows Chevron and services firms Halliburton, Schlumberger, Baker Hughes and Weatherford International to continue certain work with Venezuela’s state-owned oil company PDVSA outside of US sanctions.
“Chevron will continue to comply with applicable laws and regulations in relation to the activities that it is authorized to undertake in Venezuela,” said Chevron spokesman Ray Fohr in a statement on Nov. 17. “We remain committed to the integrity of our joint venture assets, the safety and wellbeing of our employees and their families, and the company’s social and humanitarian programs during these challenging times.”
The 180-day waiver now extends until June 3.
The waiver, known as General License 8, had been extended on the argument that the presence of US companies would be necessary to prevent the collapse of Venezuela’s oil sector and ease an expected recovery once President Maduro is forced out of power. However, Maduro still refuses to be ousted and Venezuela’s oil production has further depleted to minimal levels. Some within the Trump administration pushed to end to the waiver to increase pressure on Maduro.
Venezuela’s crude production has plunged from nearly 2.5 million b/d five years ago down to just 320,000 b/d in October, according to the US Energy Information Administration.
S&P Global Platts Analytics expects production to fall to 275,000 b/d in November and December, with a modest pickup in 2021.