Exclusive: Chevron set to swap Venezuelan oil if US eases sanctions, sources say

HOUSTON/WASHINGTON, March 14 (Reuters) – Chevron Corp. is preparing to take operational control of its joint ventures in Venezuela if Washington eases sanctions on Caracas to boost crude supplies after it banned Russian oil imports, according to three people familiar with the matter.

The U.S. oil major has begun building a sales team to market oil from Venezuela, two of the interviewees said. If U.S. approvals are received, Chevron aims to expand its role in the four joint ventures it shares with state-owned PDVSA, they added.

Chevron has asked the U.S. government for a license broad enough to have more say over its joint ventures in Venezuela, a first step to recover crude production and exports, and to control where the oil is sent, the three people said. . Since 2020, Chevron has delegated most decision-making to PDVSA, a public company.

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U.S. officials, however, have clarified that any further clearance will depend on Venezuelan President Nicolas Maduro’s decision to take further policy steps, two sources said, such as releasing other imprisoned Americans and setting a firm date for the resumption of negotiations with the Venezuelan opposition.

Chevron’s proposed measures could revitalize Venezuela’s oil production and exports after years of underinvestment and sanctions have reduced it to about 755,000 barrels per day (bpd) last month, from 2.3 million. bpd in 2016. Chevron’s joint ventures with PDVSA had produced about 200,000 bpd before US sanctions and lack of funding reduced their production.


No date has been set for the issuance of the authorization. But Chevron has begun preparations for employees to obtain Venezuelan visas in Aruba, ready to travel to Caracas if the US Treasury eases restrictions, the people said.

Last week, US President Joe Biden banned US imports of Russian oil, adding to a series of sanctions following Russia’s invasion of Ukraine, an action Moscow called a “special military operation”.

Chevron aims to begin moving Venezuelan oil to refineries as early as next month. Last week’s U.S. ban on Russian imports allows oil under existing contracts to arrive in the country until April 22.

“Since Venezuelan barrels were banned in the United States in 2019, and Colombia and Mexico reduced their main exports to the United States, Russian barrels have been supplying refiners in the Gulf,” said a person involved in the case. the talks.

Chevron had significantly reduced its presence in Venezuela after Washington tightened sanctions against Venezuela in 2020. For years, Chevron and other PDVSA partners have called for greater operational oversight.

The United States is drafting a new license that would allow Chevron to take a more active role in Venezuela, a person familiar with the matter said. Washington is considering similar oil-for-debt clearances for Spain’s Repsol (REP.MC) and Italy’s Eni SpA. They collectively owe billions of dollars to their Venezuelan joint ventures.

Chevron declined to comment, but reiterated in a statement that its operations in Venezuela are in compliance with U.S. sanctions and remain “a constructive presence in Venezuela.”

PDVSA and the Venezuelan oil ministry did not respond to requests for comment.

A State Department spokesperson said the US government “does not anticipate sanctions actions,” but added, “We have made it clear that we will revisit certain sanctions policies if the Venezuelan parties make significant progress. in the Venezuelan-led negotiations in Mexico toward a democratic solution.”

The US Treasury Department did not immediately respond to a request for comment.


This month, Washington quietly restarted diplomatic engagement with Venezuela, a close Russian ally. Last week, Maduro freed two jailed Americans and Washington insisted that others be freed as well. Maduro has expressed his willingness to resume dialogue with the opposition after suspending talks in Mexico in October. US officials want a firm commitment to discuss free elections.

On Sunday, US National Security Advisor Jake Sullivan told NBC that any sanctions relief for Venezuela must be tied to “concrete action” by Maduro.

The Biden administration had not made Venezuela a foreign policy priority before. This changed when shale producers in the Middle East and the United States did not increase their crude supplies when the White House asked them to do so after the invasion of Ukraine.

Congressional Republicans and even some of Biden’s fellow Democrats such as U.S. Senator Bob Menendez have opposed any deal that would benefit the socialist president. Washington condemned Maduro’s re-election in 2018 as a sham.

The United States imported 670,000 barrels per day (bpd) of Russian oil and fuel last year. One of the few countries able to replace these imports is Venezuela. Prior to the sanctions, its oil was primarily destined for US refiners on the Gulf Coast. Read more


Barrels marketed by Chevron could help PBF Energy (PBF.N), Valero Energy (VLO.N) and Phillips 66 (PSX.N) close their supply gaps, the source said. All have operations intended to run heavy oils.

Chevron has had parallel discussions with PDVSA to expand the governance of its joint ventures. Any deal would likely be temporary unless Venezuela enacts sweeping reforms to its oil laws that require PDVSA to be the majority shareholder in any joint venture.

While PDVSA President Asdrubal Chavez supports an expanded operational role for Chevron, some senior Venezuelan officials are resisting the change, three sources familiar with the matter said.

Venezuela holds about 300 billion barrels of oil reserves, the largest in the world, but has been unable to meet its production targets due to underinvestment, poor maintenance, lack of supplies and US sanctions. Read more

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Reporting by Marianna Parraga in Houston and Matt Spetalnick in Washington; edited by Gary McWilliams and David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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