The U.S. oil major has started putting together a trading team to market Venezuelan oil. Chevron plans to expand its position in the four joint ventures it has with state-run corporation PDVSA if U.S. clearances are granted.

Chevron has reportedly sought the US government for a license that would allow it to have more say in its joint ventures in Venezuela as a first step toward recovering crude output and exports and controlling where oil is moved. Chevron has transferred major decision-making to the state-run PDVSA since 2020.

Although it is believed that US officials have made it clear that any new authorization will be contingent on Venezuelan President Nicolas Maduro taking additional political steps, such as releasing more imprisoned Americans and setting a firm date for resuming negotiations with the Venezuelan opposition.

After years of underinvestment and sanctions, Venezuela’s oil output and exports were reduced to around 755,000 barrels per day (bpd) this month, down from 2.3 million bpd in 2016. Before US sanctions and a shortage of cash, Chevron’s joint ventures with PDVSA generated over 200,000 bpd.

THE US SANCTIONS DURING THE VENEZUELAN CRISIS

During the presidential crisis in Venezuela, the US imposed new economic sanctions on the petroleum, gold, mining, food, and banking industries in January 2019. More than 150 corporations, vessels, and people had been sanctioned by the US as of April 2019.

The US put sanctions on PDVSA, Venezuela’s state-owned oil and natural gas firm, to pressure Venezuelan President Nicolás Maduro Moros to resign. The sanctions restrict PDVSA from receiving payment for petroleum shipments to the United States, freeze $7 billion in PDVSA assets in the United States, and prevent US companies from selling naphtha to Venezuela.

The sanctions were imposed in November 2018, restricting the Venezuelan government’s access to the US debt and equity markets. EO 13827 made it illegal to use Venezuelan digital currency, and EO 13835 made it illegal to buy Venezuelan debt.

VENEZUELA’S ALLIANCE WITH RUSSIA

To protect PDVSA’s international assets from US sanctions, President Maduro ordered the company’s European office to relocate to Moscow. Rosneft, the Russian state-owned oil corporation, has provided naphtha to Venezuela and continues to buy Venezuelan petroleum, citing contracts signed before the US sanctions. Before the imposition of sanctions, Venezuela’s heavy crude oil exports were dependent on diluents bought from the United States.