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Chevron’s hope for expanding its operations in Venezuela hinge on election talks taking place between disputed Venezuelan President Nicolás Maduro and his opposition, Juan Guaido, according to anonymous Reuters sources close to the matter.
Chevron signed over the summer a TSA with Venezuela’s state-run oil company PDVSA, and later asked the U.S. Treasury Department to ease sanctions on the country. The easing of sanctions on PDVSA would allow Chevron greater control over its projects there, and effectively boosting Venezuela’s crude oil production, which has been under sanction since January 2019.
The United States, however, which recognizes Juan Guaido as Venezuela’s interim President and not Nicolas Maduro, doesn’t appear to have any intention of releasing Venezuela’s oil industry from sanctions—that is, unless Nicolas Maduro is willing to sit across from a table with Juan Guaido to discuss free elections.
The United States—along with dozens of other countries—renounced the legitimacy of Venezuela’s Maduro, instead recognizing Juan Guaido as the country’s interim president since early 2019. China and Russia continue to back Maduro.
Juan Guaido’s experts have raised concerns about Chevron’s request, arguing that such a move could violate current Venezuelan laws, which prohibit private control of any oil joint venture. Guaido has asked officially requested details of Chevron’s request, Reuters said earlier this month. U.S. Assistant Secretary of State for Western Hemisphere Brian Nicholas will hold a virtual meet on Tuesday with the Guaido camp to discuss the matter as well as the status of the election talks.
A final decision on Chevron’s request has not yet been made, although the stakes are high for increasing global oil production as the Biden Administration faces increased scrutiny over its policy decisions as relates to energy in the runup to midterm elections in November.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.