PDVSA to Assume Control of Chevron Operations in Venezuela Amid Sanctions Rescission
PDVSA will take full control of crude production in Venezuela after Chevron’s U.S. operational license was terminated by the Trump Administration. Chevron’s operations must cease by April 3, 2023. PDVSA plans to maintain production levels and adapt its strategies for refining and exporting oil.
The state-owned oil company PDVSA of Venezuela will assume sole control over the crude production previously conducted in joint ventures with Chevron, following the termination of Chevron’s operational license by the Trump Administration. The decision, detailed in a PDVSA document, comes after President Trump’s cancellation of a sanctions waiver that previously allowed Chevron to return to Venezuela and contribute to oil production growth.
President Trump ended the sanctions waiver, citing Venezuela’s limited electoral reforms and inadequate actions regarding migration, which he described in a statement posted on Truth Social. He expressed the need to reverse concessions granted by former President Biden to Venezuelan President Nicolás Maduro concerning oil transactions.
As part of the sanctions rollback, the U.S. Treasury has mandated that Chevron cease its operations and exports from Venezuela by April 3. Prior to this, Chevron had been exporting approximately 200,000 barrels per day of heavy crude to the U.S., leveraging the waiver instituted in 2022. With the rescinded waiver, PDVSA is preparing for operations independently of Chevron.
PDVSA has outlined three production scenarios post-April 3, aiming to sustain output levels of between 105,000 and 138,000 barrels per day of Hamaca heavy crude from the Petropiar site in the Orinoco Belt. Plans indicate that part of this production will fulfill domestic refining needs, while the remainder will be directed towards markets outside the U.S. PDVSA also intends to enhance the supply of diluents required for heavy crude upgrading to facilitate pipeline flow, with the goal of preventing shutdowns at the heavy crude upgrader or related oilfields.
In summary, PDVSA has initiated plans to take full control of crude oil operations in Venezuela after Chevron’s operational license was revoked by the Trump Administration. The firm aims to maintain production levels while adjusting its strategy to export and refine crude as needed, avoiding the disruption of key facilities. This transition marks a significant shift in Venezuela’s oil landscape, impacting international relations and market dynamics.
Original Source: oilprice.com
