Signage for Chevron Corp at one of its service stations. (File photo )

Chevron keeps Venezuela foothold with new US sanctions waiver

Signage for Chevron Corp at one of its service stations. (File photo )

Chevron Corp and top American oil-service companies won an extension to keep a limited presence in Venezuela despite US sanctions intended to starve President Nicolas Maduro’s regime of petro-dollars.

In the first renewal granted under President Joe Biden’s Administration, the US Treasury Department extended until December 1 its authorisation for Chevron, Halliburton Co, Schlumberger Ltd, Baker Hughes Co, and Weatherford International Plc to conduct business that’s essential to preserve their assets, protect employees and reimburse contractors.

US President Joe Biden, accompanied by Vice-President Kamala Harris, address media personnel in the Oval Office of the White House, Thursday, March 11, 2021, in Washington, DC, USA. Under Biden’s Administration, Chevron has received an extension to operate in Venezuela.
(Photo: AP/Andrew Harnik)

The previous deadline was June 3. Since last year, the companies have been barred from any activity related to producing oil.

Venezuela, home to the world’s largest crude reserves, has seen its once-massive oil industry collapse under the sanctions imposed on Maduro’s regime. Though crude prices have surged as the global economy begins to recover from the COVID-19 pandemic, oil production from the South American country has barely risen.

CARACAS, VENEZUELA – MARCH 12: President of Venezuela Nicolas Maduro salutes during a press conference at Miraflores Government Palace on March 12, 2020, in Caracas, Venezuela. Maduro, during which he announced a travel ban for travellers from Europe and Colombia and restricted gatherings and massive events in an attempt to stem the proliferation of the COVID-19 pandemic. Maduro also confirmed there are no cases in Venezuela. (Photo: Carolina Cabral/Getty Images)

The reprieve comes amid moves from the Maduro regime that could lead to an eventual thawing of tensions between Washington and Caracas. Maduro reached an agreement to allow the United Nations World Food Program to start operating in Venezuela and moved American Citgo Petroleum Corp executives from prison to house arrest, while Venezuela’s Congress approved a new electoral board that includes Maduro opponents. Opposition Leader Juan Guaido in May proposed gradually easing sanctions as an incentive for Maduro to schedule free elections.

Chevron first set foot in Venezuela in the 1920s and has since become one of the largest private oil companies operating in the country. It’s a partner of Petroleos de Venezuela SA (PDVSA) in four oil ventures which in 2019 produced 34,000 barrels of crude oil.

Members of the Bolivarian National Guard (GNB) stand guard at a Petroleos de Venezuela SA (PDVSA) gas station in the Petare neighborhood of Caracas, Venezuela, on Thursday, March 26, 2020. Chevron is a partner of State-owned PDVSA. (File photo)

The US ratcheted up sanctions against Caracas in early 2019 by imposing a de facto ban on PDVSA followed by sanctions on two Rosneft PJSC subsidiaries and multiple lesser-known companies helping the country to export oil. The OPEC founding member currently produced 445,000 barrels a day in April, about 20 per cent of what it used to produce five years ago.