U.S. supermajor Chevron is discussing with the U.S. Department of State the possibility that the United States ease some of the sanctions imposed on Venezuela's oil industry by the Trump Administration, sources familiar with this week's meetings told Bloomberg on Thursday.
Chevron, which has been operating in Venezuela for decades, has been repeatedly given a waiver to operate in the country sitting on the world's biggest oil reserves. The latest extension from the U.S. Department of Treasury came in November 2020, allowing Chevron to remain in Venezuela until June 3, 2021.
The U.S. supermajor is not leaving Venezuela, but it is complying with the U.S. Administration's requirements, chief executive officer Michael Wirth said last year. Several months later, Chevron fully impaired its $2.6 billion investment in Venezuela because of uncertainties over the current operating environment and overall outlook, while reporting its worst loss for decades for the second quarter of 2020.
Now Chevron, as well as India's Reliance Industries, are reportedly talking to officials from the U.S. Department of State to request a more lenient sanctions regime from President Joe Biden's Administration. The first order of business, according to a Bloomberg source, would be requesting from the Administration to allow the so-called oil swaps with Venezuela under which companies get crude oil from Venezuela in exchange for supplying it with diesel.
Those oil swaps were sanctioned in October 2020, one source told Bloomberg.
Chevron is constantly talking to the U.S. Administration to make sure it is in full compliance with all applicable laws and regulations, Ray Fohr, a spokesperson for Chevron, told Bloomberg in response to the report.
Days before President Biden's inauguration, Reuters reported that importers of Venezuelan crude oil, executives from companies supplying fuel to Venezuela, and humanitarian groups also planned to ask the new Administration to allow the crude oil-for-diesel swaps.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
Comments
If Chevron can manage to use its influence to persuade the Biden administration to ease some of the sanctions imposed on Venezuela’s oil industry, it will earn the gratitude of the long-suffering Venezuelan people.
It is probable that President Biden will take a softer, more diplomatic and humanitarian approach to Venezuela. He may decide to lift or at least ease the intrusive US sanctions against it as a humanitarian gesture to ease the suffering of the Venezuelan people and also to pave the way for a political solution to the crisis.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London