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Chevron Seeks Easing Of Some U.S. Sanctions On Venezuela’s Oil

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

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  • Mamdouh Salameh on January 28 2021 said:
    Given its 100-year long fruitful association with Venezuela, US oil supermajor Chevron is not only key to rebuilding Venezuela’s oil industry but is also capable of helping erase the images of the ugly American and the ugly face of capitalism that former President Trump projected to the world with his intrusive sanctions on Venezuela and project instead a friendly and humanitarian face of capitalism.

    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

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