Chevron has terminated the oil production, service and procurement contracts it had to operate in Venezuela, delegating its joint-venture governance to its partner, state company PDVSA, but it plans to retain its direct staff in the country.
The Trump administration had granted restricted authorization for Chevron, a US oil producer, to keep assets in Venezuela as the Biden-era waiver expires. This move allows Chevron to maintain its presence in a country with the world’s largest crude reserves, but massive geopolitical pressures and economic sanctions. ⁽¹⁾
Chevron and several European firms had been in talks with officials in Washington for authorization to preserve their assets in Venezuela amid President Donald Trump’s restrictive policy toward the country.
Restrictive Guidelines for Chevron
Under the new authorization, Chevron will not be allowed to pump oil in Venezuela, export its oil, or expand to prevent possible deals with Venezuelan President Maduro.
Chevron said in a statement on Tuesday: “General License 41B has expired, and Chevron’s continued presence in Venezuela remains in compliance with all applicable laws and regulations, including the sanctions framework provided for by the US government.” ⁽²⁾
Chevron had tried to negotiate with the Trump administration for a while to allow them to keep pumping oil in Venezuela. However, the talks collapsed after Florida lawmakers threatened to block Trump’s spending bill unless Chevron was forced to withdraw. ⁽³⁾
The new, limited authorization allows Chevron to preserve its infrastructure but prohibits oil exports or operational expansion, placing the company in a familiar holding pattern.
Following the new guidelines, Chevron executives met with contractors and Venezuelan top officials including oil minister Delcy Rodriguez, informing about the next steps. ⁽⁴⁾
Chevron’s Venezuela Exports Cut Short
Venezuela in April canceled cargoes scheduled to Chevron, citing payment uncertainties related to US sanctions, which cut short a May 27 deadline to wind down transactions. Chevron was exporting as much as 290,000 barrels per day of Venezuelan oil, almost a quarter of the country’s output. ⁽⁵⁾
Worldwide, Chevron produced 1.74 million barrels of oil and gas last year. Some of its biggest assets are in the Permian Basin of West Texas and New Mexico, the Gulf of America, and Kazakhstan. This week, Exxon and Chevron are battling over rights to one of the world’s most coveted oil projects in Guyana. ⁽⁶⁾
PDVSA, which is the majority stakeholder of the joint ventures, is expected to continue overseeing oilfield workers. Chevron’s compensation from the PDVSA for its joint-venture workers could be suspended.
The state firm is also taking over sales of crude produced by the ventures, which could lead to a new accumulation of debt owed to its partner. Earlier this month, the state firm began exporting heavy crude jointly produced.
Washington Tightens Grip on Caracas
Trump has accused Maduro of failing to make progress on migrant returns and electoral reforms toward the restoration of democracy in the South American nation, saying in February he would revoke the license. ⁽⁷⁾
Venezuela, an OPEC member, has the world’s largest reserves of crude. But its oil output is a fraction of what it was a decade ago due to a lack of investment, mismanagement at PDVSA, and US sanctions since 2019. ⁽⁸⁾
