CARACAS: The US Treasury Department on Saturday granted permission for Chevron Corp, the last major US oil company operating in Venezuela, to continue working in the country until April 22.
The US imposed sanctions last year that barred imports of Venezuelan oil and transactions made in US dollars with Venezuela’s state-run oil company PDVSA, in move a designed to starve Caracas of oil dollars and oust President Nicolas Maduro.
The restrictions cut Venezuela’s oil exports by 32 percent last year, but Maduro has remained in power, supported by PDVSA and the country’s military.
Chevron and oilfield service firms Baker Hughes, Halliburton, Schlumberger, and Weatherford International have regularly received permission to remain in the country. The four oilfield service firms have largely ceased operations there.
The extension was a win for some Trump administration officials, including Secretary of State Mike Pompeo, who see value in keeping the company in Venezuela, which has the world’s largest reserves of oil.
Chevron has been in Venezuela for nearly a century and has kept about 300 direct employees there through years of turmoil. The company’s Venezuelan oil and gas production has been falling and was about 32,000 barrels per day during the most recent quarter for which figures were available.
A Chevron spokesman declined to comment, whilst representatives for Baker Hughes, Halliburton and Schlumberger were not immediately available.
The company posted a $104 million loss on its Venezuela operations for the nine months ended Sept. 30, 2019. It would lose about $2.7 billion in assets if required to leave the country, Chevron said.
A 1 million-barrel cargo of Venezuelan crude consigned to Chevron was scheduled to load this month at Venezuela’s Jose port, according to internal PDVSA documents seen by Reuters.
The operation does not violate sanctions, and proceeds from the oil export are used by a joint venture to cover maintenance costs, Chevron said.
The Treasury Department said the license extension did not authorize transactions related to shipments of diluents, which Venezuela needs to thin its heavy oil for processing.
The US Treasury also issued a further license on Saturday, allowing transactions related to PDVSA’s 2020 bond, which is backed by shares in US refiner Citgo Petroleum Corp. The new license will take effect from April 22, replacing a previous license that last year had authorized transactions from Jan 22.