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Washington Renews Chevron's Waiver To Keep Operating In Venezuela

The Biden Administration has renewed US-based Chevron’s waiver to keep operating in sanctioned Venezuela until December 1, the US Treasury Department said on Tuesday.

The license only allows Chevron to conduct limited types of activity.

Chevron has received numerous special operating licenses since 2019 to keep operating in Venezuela during the sanctions—the latest issued in November.

In April of last year, the White House ordered Chevron to “wind down” its Venezuela operations as of December 1, 2020. But in the eleventh hour, the Trump Administration granted Chevron a waiver to continue doing business in Venezuela—at least a partial waiver that allowed it to conduct some business there—despite the sanctions. It allowed Chevron to continue to operate in the sanctioned country through June 3, 2021.

Today’s waiver was the eighth special operating license Chevron has received.

After it was ordered to quit Venezuela, Chevron wrote down the value of its Venezuelan assets—even though it never stopped operating there. This resulted in a $2.6 billion impairment charge for Q2, 2020, and a removal of 160 million barrels of its proven oil reserves that were on its books.

Today’s waiver also grants the same permissions to U.S. oilfield service providers doing business in Venezuela, such as Schlumberger and Halliburton.

The waivers do not allow the OSPs to repair or improve wells, nor are they able to hire additional staff or negotiate new loans. The only permitted activities are those that are “necessary for the limited maintenance of essential operations in Venezuela or the wind down of operations.”

Chevron has been in discussions with the U.S. State Department about the possibility of easing up on sanctions against Venezuela.

Companies that violate the terms of the special license are subject to U.S. government sanctions or other punitive measures.

By Julianne Geiger for Oilprice.com

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