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Despite higher oil prices, U.S…

Two Chevron Employees Could Face Treason Charges

CVX

Two Chevron Corp. workers arrested in Venezuela last week could face treason charges, according to sources quoted by Reuters on Monday.

The draft charges that used the word treason, seen by Chevon’s own lawyers last week, may put Chevron squarely in the middle of the escalating feud between PDVSA and foreign oil companies at best, and between the Trump Administration and Maduro’s socialist regime at worst.

The employees, who oversaw the Petropiar project co-owned by PDVSA and Chevron, were jailed when they allegedly refused to sign supply contracts concocted by PDVSA that skipped the normal competitive bidding process, according to multiple sources. The parts mentioned in the contract were reportedly double the fair market price.

The Petropiar joint venture consists of PDVSA’s 70 percent share, along with Chrevron’s 30 percent. It was reported a year ago that PDVSA had offered Rosneft a 10 percent stake in the project—a stake  worth $600 million-$800 million, according to valuations of similar deals as reported by Reuters back in August.

With Venezuela already in turmoil as oil production continues to fall in the crisis-stricken country, strong-arming the already-dwindling foreign players in-country may prove unwise.

Another foreign oil major doing business in Venezuela, French Total SA, announced just last week that despite the near-economic collapse, it would stick it out there—even as the European Union discussed stricter sanctions on the Latin American country.

Related: Venezuela’s Oil Sector May Soon Have New Owners

Other oil majors have given up on Venezuela already, after in mid-2000, then Venezuelan President Hugo Chavez confiscated a 60-percent share in all oil projects in country and turned them over to PDVSA.

Other oil majors operating there have recently spirited employees out of the country, citing safety concerns—a move that now seems particularly prudent given the treason charges that two Chevron employees may soon find themselves up against.

Chevron did remove an unspecified number of employees from Venezuela back in August 2017.

By Julianne Geiger for Oilprice.com

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