Chevron Granted Restricted US License to Operate in Venezuela

Summary

• New license to allow Chevron to make decisions, contribute to procurement and payments
• No money from oil proceeds can be transferred to Maduro’s gvmt
• Chevron had reduced operations, ordered tanker fleet to sail away

HOUSTON, July 30 (Reuters) – Chevron has been granted a restricted U.S. license to operate in sanctioned Venezuela, three sources close to the decision said on Wednesday, adding that no money from oil proceeds can be transferred in any way to the administration of Venezuelan President Nicolas Maduro.

Last week, Reuters reported that the U.S. was preparing to grant new authorizations to key partners of Venezuela’s state-run PDVSA, starting with Chevron, to allow them to operate with limitations in the OPEC nation and swap oil.

The authorization, issued privately to the U.S. oil producer, opens a new window for its oil business in Venezuela only two months after a deadline previously set by Washington for joint-venture partners of state company PDVSA to wind down transactions, including oil exports.

Chevron and a handful of European oil companies, including Spain’s Repsol and France’s Maurel & Prom, had been granted authorizations by the administration of former President Joe Biden, which allowed them to expand operations in Venezuela and export oil to the U.S. and Europe.

Amid criticism of migration and democracy in Venezuela, U.S. President Donald Trump in February said the licenses would be revoked and gave the companies until late May to complete transactions.

As a consequence, Chevron reduced operations in Venezuela and instructed a dedicated fleet of tankers to sail away, delegating operations to PDVSA. Washington allowed Chevron to preserve its assets in the OPEC country, including its joint-venture stakes.

The new license would now allow the U.S. company to make decisions at its joint ventures and contribute to procurement and contract payments, two of the sources said.

However, since no payments can be made to Venezuela, including mandatory royalties and taxes, it was not immediately clear if PDVSA would assign Chevron any crude cargoes bound to the U.S.

Chevron declined to comment on the license and said it conducts business globally in compliance with laws and regulations, as well as the U.S. sanctions framework. PDVSA did not reply to a request for comment.

A spokesperson for Maurel & Prom said the company has not received any authorization yet. Repsol, Italy’s Eni and India’s Reliance, which had authorizations until earlier this year, did not reply to requests for comment.

A senior U.S. official declined to refer to any specific licenses, but said the U.S. would not allow Maduro’s government to profit from the sale of oil.

In April, when the previous licenses were still current, PDVSA canceled cargoes allocated to Chevron over problems receiving mandatory payments. Chevron has not exported Venezuelan oil since.

Though Venezuela and the U.S. conducted a prisoner swap this month, relations between the two countries remain tense.

The Trump administration, which has supported Venezuelan opposition leaders who say their candidate won last year’s election, not Maduro, has been facing pressure over the U.S. loss of Venezuelan barrels and the flow is now going to China.

Share This: