Chevon Corp. may be on the verge of gaining US approval to expand its oil operations in Venezuela, possibly as early as this weekend, according to reports.
The approval is conditional on whether talks resume between the Venezuelan government, led by Socialist President Nicolás Maduro, and the country’s opposition.
US officials have offered a slight relaxation of sanctions and released some Venezuelan prisoners held in US prisons.
The Biden administration’s rapprochement with Venezuela comes amid slowing US shale production, as well as Russian oil shrinking under sanctions, and Saudi Arabia signaling OPEC+ production cuts.
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To stave off rising energy prices this year, President Biden has released more than 200 million barrels from the country’s emergency oil reserves, though that is coming to an end soon.
Chevron’s existing license to operate in Venezuela expires December 1. If the company doesn’t get approval to expand operations before then, the US could renew its existing license, allowing the oil giant to keep its assets without expanding, sources familiar with the matter told Reuters. .
Chevron has had a joint venture with PDVSA, the Venezuelan state oil company, producing about 200,000 barrels a day before US sanctions and lack of funding cut production.
US officials and their Venezuelan counterparts are pushing to hold talks in Mexico City this weekend — the first in more than a year.
Venezuela produces up to 800,000 barrels of oil per day. That figure is higher than the average of 525,000 barrels it produced a year ago, but a long way from the failed target of 1 million a day by the end of 2021 and nowhere near the more than 3 million barrels a day the country produced in the 1990s.
Venezuela’s oil is also heavier and grittier and is more suitable for making asphalt and petrochemicals than for cars. Extracting gasoline and diesel from Venezuela’s oil would require a complicated refining process.
The country also lacks quality engineers, as many of those who ran Venezuela’s industry at its peak were expelled from the country during the Hugo Chavez era, when the socialist dictator nationalized Venezuela’s oil industry.
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FOX Business has contacted Chevron and the US Treasury Department for comment.
A spokesman for the National Security Council (NSC) told FOX Business that the US “believes that we should support the people of Venezuela and their democratic aspirations.”
Any action will depend on the respective parties resuming talks and announcing other specific commitments to support the people of Venezuela, the spokesman said.
“No announcement or action is being taken in response to energy prices, as we have said in the past, what matters is that the regime takes the necessary steps to support the restoration of democracy in Venezuela,” the spokesman said.