Page 4 - LatAmOil Week 50 2022

LatAmOil COMMENTARY LatAmOil

Chevron is pursuing four JVs with PdVSA (Image: Chevron)

What’s next for

Chevron in Venezuela?

The US major is expected to send a cargo of Merey crude to the US Gulf Coast market by

the end of the year but faces constraints in its ability to invest in upstream production

IN late November, the US Treasury Depart- for Chevron to resume shipments of Venezuelan
ment’s Office of Foreign Asset Control (OFAC) crude to the US in the near future. Argus Media
WHAT: issued a document known as General Licence reported on December 9, citing a company
Following limited sanc- (GL) 41 that allows California-based Chevron source, that the US major was expected to load
tions relief, Chevron’s to work in Venezuela without any penalty under a tanker with Merey, a heavy crude blend with
first priority in Venezuela the existing sanctions regime. a specific gravity of 16 degrees API, for deliv-
is likely to be oil exports
rather than production. There are some limits to GL 41, in that it only ery to a US Gulf Coast refiner before the end of
permits Chevron to resume operations related the year. This will be the first Venezuelan crude
WHY: to existing joint ventures with Venezuela’s cargo sent to the US market since 2018, it noted.
GL 41 limits capital ex- national oil company (NOC) PdVSA and does Despite these developments, the shift in
penditures in Venezuela. not allow the launch of any new projects. How- Chevron’s Venezuelan posture will not be imme-
ever, the issuance of the licence is a significant diate and complete. That is, the US firm will not
WHAT NEXT: shift. In general terms, it marks the US major’s be moving back into the business of extracting
The company is laying return to playing an active role in Venezuela’s oil Venezuelan oil right away. Instead, its initial
the groundwork for future and gas sector after nearly four years of forced actions will focus on handling crude that has
upstream development. idleness. already been taken out of the ground and put
And in more specific terms, it clears the way into storage.

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