Chevron, Venezuela Sign Contracts to Revive Oil Production, Sources Say
© Richard DrewThe logo for Chevron appears above a trading post on the floor of the New York Stock Exchange, Friday, Aug. 16, 2019
© Richard Drew
WASHINGTON (Sputnik) - Chevron has signed contracts with the Venezuelan government and state oil company PDVSA to resume oil production operations in the country, sources told Sputnik.
The contracts enable the parties to implement the new US government license in accordance with the guidance provided by the US Treasury Department's Office of Foreign Assets Control (OFAC), the sources said.
A Chevron spokesperson told Sputnik the company will conduct its business in Venezuela in compliance with the sanctions framework provided by OFAC.
On Saturday, the Treasury Department issued a general license authorizing Chevron to resume a six-month natural resource extraction operation in Venezuela. However, the US government retains the authority to amend or revoke the authorization at any time should the Venezuelan government fail to negotiate in good faith or follow through on his commitments with the country’s opposition.
A senior Biden administration official told reporters that Venezuela-related sanctions and restrictions imposed by the United States remain in place, but the US administration will consider whether its policies remain open to further calibrating its sanctions on Venezuela, which will depend on whether the Venezuelan government takes concrete steps to address several key issues.
26 November 2022, 21:19 GMT
Chevron is partnering with PDVSA on four oil fields that, according to Bloomberg estimates, cut production to around 50,000 barrels per day from 160,000 barrels per day in 2018.
Valero Energy Corp, PBF Energy and Citgo Petroleum are reportedly showing interest in gaining access to the Venezuelan oil that Chevron is expected to import in the coming weeks.
The sources said the license does not allow for Chevron to expand its operations in Venezuela and Western partners would need to be allowed to invest to increase oil production. An increase will take time given that US sanctions are still in place, they said.
The United States is looking at Venezuela as an additional source of crude oil, but has no intention of a blanket lifting of the sanctions it has imposed on the country, sources told Sputnik earlier.
The Biden administration is looking for options to help lower gasoline prices in the United States after OPEC+ decided to slash production and the US Strategic Petroleum Reserve supply dropped to record lows after the administration released some 180 million barrels since March.