Chevron Corp on Saturday received a U.S. license allowing the second-largest U.S. oil company to expand its production in Venezuela and bring the South American country's crude oil to the United States.
The decision grants broader rights for the last big U.S. oil company still operating in U.S.-sanctioned Venezuela. However, it restricts any cash payments to Venezuela, which could reduce the oil available to export. License terms are designed to prevent state-run oil firm Petróleos de Venezuela, known as PDVSA (PDVSA.UL), from receiving proceeds from Chevron's petroleum sales, U.S. officials said. The license lasts for six months and will be automatically renewed monthly thereafter, the U.S. Treasury said.
The U.S. authorization "brings added transparency to the Venezuelan oil sector" and allows Chevron to benefit from sales of "oil that is currently being produced" by its joint ventures with PDVSA, the California-based company said in a statement.
Following oil sanctions on Venezuela in 2019, Chevron received an exemption to trade its Venezuelan crude to recoup pending debts. But those privileges were suspended a year later. Chevron's four PDVSA joint ventures produced about 200,000 barrels per day of crude oil and exported the crude around the world prior to the sanctions.
The United States issued the license on the same day that Venezuela and opposition leaders began a political dialogue in Mexico City by agreeing to ask the United Nations to oversee a fund providing food, healthcare and infrastructure to Venezuelans. Terms bar Chevron from helping the OPEC member develop new oilfields but provides a way for the company to recoup some of the billions of dollars owed by PDVSA through the oil sales. It also allows the U.S. company to import supplies to help process the country's crude oil into exportable grades.
Oilfield service firms Baker Hughes, Halliburton, Schlumberger and Weatherford International had their U.S. licenses renewed but not expanded. That limits any wider expansion of Venezuelan oil production.
