US to allow Chevron to sell Venezuelan oil

by Zack Budryk - 11/26/22 1:24 PM ET

FILE – A Chevron sign is displayed outside one of the company’s gas stations in Bradenton, Fla., Feb. 22, 2022. The Biden administration is easing some oil sanctions on Venezuela in an effort to support newly restarted negotiations between the Venezuelan government and its opposition. The Treasury Department is allowing Chevron to resume “limited” energy production in Venezuela after years of sanctions that have dramatically curtailed oil and gas profits that have flowed to President Nicolás Maduro’s government. (AP Photo/Gene J. Puskar, File)

The Treasury Department will loosen sanctions to allow Chevron to pump oil in Venezuela, the company confirmed Saturday.

“Chevron confirms the receipt of General License No. 41 as published by the Office of Foreign Assets Control (OFAC) and which authorizes the production and lifting of petroleum or petroleum products produced by the Chevron Joint Ventures (JVs), and to conduct related maintenance, repair, or servicing of the Chevron JVs. For additional information, please see OFAC’s General License No. 41,” a Chevron spokesperson said Saturday.

The license will extend for the next six months and can be revoked early at any time. It comes as Venezuelan president Nicolas Maduro and members of the South American nation’s opposition party have resumed talks in Mexico City. Petróleos de Venezuela, S.A., the state-owned oil company, will not be able to receive profits from Chevron activity under the terms of the allowance.

“This action reflects longstanding U.S. policy to provide targeted sanctions relief based on concrete steps that alleviate the suffering of the Venezuelan people and support the restoration of democracy,” the Treasury Department said in a statement.

Reuters first reported the Treasury was prepared to grant Chevron a license last Wednesday.

While the Treasury emphasized humanitarian rationale for the decision, it comes after months of speculation that the federal government is considering easing Venezuelan sanctions for alternative sources of energy amid OPEC nations’ reticence to increase oil production. Chevron previously secured an exemption in 2019 for compensation for its Venezuelan crude supplies amid sanctions, but the next year the Trump administration reversed the exemption as part of a pressure campaign against Maduro’s government.

Venezuela has the largest oil reserves of any single nation, at just under 300 billion barrels a day according to BP estimates, but U.S. sanctions and lack of funds to invest in production have strangled its capacity to take full advantage of the reserves.

Tags Chevron Treasury Department Venezuela