Venezuela has announced an election date - July 28 - and Maduro is the only candidate, with a return of U.S. sanctions at stake. Maduro banned the only opposition candidate, Maria Corina Machado, from running in what the opposition says are politically motivated allegations of financial misconduct.
Washington has so far resisted a reinstatement of sanctions, even as Maduro has attempted to create an international incident by declaring the takeover of Guyana’s oil-rich Essequibo region, and even after banning the opposition in contravention of the conditions of the sanctions relief, which called for free and fair elections this year.
Washington’s response to Venezuela’s election date announcement was to note that sanctions will be restored in mid-April when the trial period ends if Machado is not allowed to run in the presidential race. There is very little time for the opposition to choose a new candidate and campaign.
It will be a messy setup for traders and E&P companies like Chevron if sanctions return in April. But Chevron has been here before, and its VP of Midstream told Reuters this week that it would keep pumping as long as it could. The oil major is also preparing to drill 30 new wells in the Orinoco Belt, which would give it an extra 250,000 bpd by next year if sanctions are not restored.
The level of production Chevron is targeting reflects its short-term view of Venezuela. The VP of Midstream told Reuters that its existing license…
Venezuela has announced an election date - July 28 - and Maduro is the only candidate, with a return of U.S. sanctions at stake. Maduro banned the only opposition candidate, Maria Corina Machado, from running in what the opposition says are politically motivated allegations of financial misconduct.
Washington has so far resisted a reinstatement of sanctions, even as Maduro has attempted to create an international incident by declaring the takeover of Guyana’s oil-rich Essequibo region, and even after banning the opposition in contravention of the conditions of the sanctions relief, which called for free and fair elections this year.
Washington’s response to Venezuela’s election date announcement was to note that sanctions will be restored in mid-April when the trial period ends if Machado is not allowed to run in the presidential race. There is very little time for the opposition to choose a new candidate and campaign.
It will be a messy setup for traders and E&P companies like Chevron if sanctions return in April. But Chevron has been here before, and its VP of Midstream told Reuters this week that it would keep pumping as long as it could. The oil major is also preparing to drill 30 new wells in the Orinoco Belt, which would give it an extra 250,000 bpd by next year if sanctions are not restored.
The level of production Chevron is targeting reflects its short-term view of Venezuela. The VP of Midstream told Reuters that its existing license offered no long-term incentive to invest.
Maduro’s campaign is one of smoke and mirrors and the art of distraction. A return to sanctions could decimate Venezuelan oil. Even with sanctions, real growth wasn’t anticipated for a couple of years, but with sanctions back on, the oil industry can only expect to decline. And it’s not just the country’s production capabilities that are lacking, but the export infrastructure is coming up short as well which hindered growth once sanctions were eased. Tanker tracking firms have noted major backlogs of vessels waiting to load crude in Venezuela in recent weeks. PDVSA doesn’t have the product ready to load onto supertankers, and January outages at a key export port aren’t solely to blame.
Venezuela’s production increased to 783,000 bpd last year, up from 569,000 bpd in 2020. That compares to more than 3 million bpd back in 1997.
And in the meantime, Guyana is now exporting more oil than Venezuela and has been for the past three months.
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