Released November 29, 2022 | SUGAR LAND
en
Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The U.S. has eased sanctions on Venezuela by allowing Chevron Corporation (NYSE:CVX) (San Ramon, California) to pump oil in Venezuela and ship it to the U.S.
On Saturday, the U.S Department of the Treasury issued a new license for Chevron to operate in Venezuela. Unlike the previous permits issued since 2020, where Chevron was restricted to maintaining bare minimum operations in Venezuela, the new license gives the company greater room to maneuver.
The most crucial section of the new license is that Chevron will be allowed to export oil from Venezuela to the U.S. In addition, other U.S. refiners may purchase the Venezuelan crude, but only after the cargo is sold to Chevron first.
In 2018, before the U.S. imposed oil sanctions on Venezuela, U.S. refiners imported about 500,000 barrels of oil per day (BBL/d) from the South American country. Those flows, however, dried up after January 2019, when sanctions restricted the imports of any Venezuelan petroleum products.
Additionally, the new license allows Chevron to import supplies such as diluents, condensates, petroleum or natural gas products to maintain its operations in Venezuela. The South American nation imports diluents, such as naphtha, to blend its heavy sour tar-like oil and make it exportable to international refiners.
The license, however, also says "U.S. persons, wherever located, remain prohibited from engaging in any transaction or dealing in or related to goods or services of Iranian origin, including the purchase or import of Iranian-origin diluents, condensates, petroleum, or natural gas."
Moreover, this U.S. decision does not allow Chevron to expand its operations or develop new oil fields in Venezuela. Instead, the license allows the company to grow, invest, and produce from its current assets in the country.
The new U.S. license, however, does not allow Chevron to pay Venezuela's state-owned Petroleos de Venezuela (PDVSA) any dividends as part of its operations in the country. The U.S. included this restriction to prevent the funnelling of funds from the energy company to the government of Nicolas Maduro.
The Treasury Department, also released a new license for other U.S. companies, such as SLB (NYSE:SLB) (Houston, Texas, and Paris, France), Halliburton (NYSE:HAL) (Houston, Texas), Baker Hughes (NYSE:BKR) (Houston) and Weatherford International plc (NASDAQ:WFRD) (Houston), which also operate in Venezuela. However, these companies will not be able to expand operations, but will be allowed to remain in the country until May 2023, when a new decision will be made.
These new licenses have been issued as the Venezuelan government and the opposition restarted new negotiations after halting them for a year. The dialogue took place over the weekend in Mexico, and the parties have so far agreed to release US$3 billion from Venezuelan funds abroad to be invested by the United Nations in infrastructure and social programs.
Among the other topics to be discussed in the next meeting, which has yet to be agreed upon, will be political conditions ahead of the presidential elections of 2024 and the municipal and local elections of 2025.
U.S. sanctions on Venezuela may be further eased as political agreements are reached between the government and opposition.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
On Saturday, the U.S Department of the Treasury issued a new license for Chevron to operate in Venezuela. Unlike the previous permits issued since 2020, where Chevron was restricted to maintaining bare minimum operations in Venezuela, the new license gives the company greater room to maneuver.
The most crucial section of the new license is that Chevron will be allowed to export oil from Venezuela to the U.S. In addition, other U.S. refiners may purchase the Venezuelan crude, but only after the cargo is sold to Chevron first.
In 2018, before the U.S. imposed oil sanctions on Venezuela, U.S. refiners imported about 500,000 barrels of oil per day (BBL/d) from the South American country. Those flows, however, dried up after January 2019, when sanctions restricted the imports of any Venezuelan petroleum products.
Additionally, the new license allows Chevron to import supplies such as diluents, condensates, petroleum or natural gas products to maintain its operations in Venezuela. The South American nation imports diluents, such as naphtha, to blend its heavy sour tar-like oil and make it exportable to international refiners.
The license, however, also says "U.S. persons, wherever located, remain prohibited from engaging in any transaction or dealing in or related to goods or services of Iranian origin, including the purchase or import of Iranian-origin diluents, condensates, petroleum, or natural gas."
Moreover, this U.S. decision does not allow Chevron to expand its operations or develop new oil fields in Venezuela. Instead, the license allows the company to grow, invest, and produce from its current assets in the country.
The new U.S. license, however, does not allow Chevron to pay Venezuela's state-owned Petroleos de Venezuela (PDVSA) any dividends as part of its operations in the country. The U.S. included this restriction to prevent the funnelling of funds from the energy company to the government of Nicolas Maduro.
The Treasury Department, also released a new license for other U.S. companies, such as SLB (NYSE:SLB) (Houston, Texas, and Paris, France), Halliburton (NYSE:HAL) (Houston, Texas), Baker Hughes (NYSE:BKR) (Houston) and Weatherford International plc (NASDAQ:WFRD) (Houston), which also operate in Venezuela. However, these companies will not be able to expand operations, but will be allowed to remain in the country until May 2023, when a new decision will be made.
These new licenses have been issued as the Venezuelan government and the opposition restarted new negotiations after halting them for a year. The dialogue took place over the weekend in Mexico, and the parties have so far agreed to release US$3 billion from Venezuelan funds abroad to be invested by the United Nations in infrastructure and social programs.
Among the other topics to be discussed in the next meeting, which has yet to be agreed upon, will be political conditions ahead of the presidential elections of 2024 and the municipal and local elections of 2025.
U.S. sanctions on Venezuela may be further eased as political agreements are reached between the government and opposition.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
