Page 5 - LatAmOil Week 50 2022
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LatAmOil                                     COMMENTARY                                            LatAmOil


                         The limits of the licence            to bother with all of the other activities needed
                         This is partly because GL 41 restricts Chevron’s   to make Venezuela’s neglected oil sector opera-
                         ability to make capital expenditures in Venezue-  tional again, such as maintenance, repair, expan-
                         lan projects. These restrictions pose an obstacle,   sion and upgrade work on transportation and
                         given the extent to which the country’s oil and   processing infrastructure.
                         gas infrastructure has deteriorated since the
                         imposition of sanctions in early 2019.  Laying the groundwork
                           But it is also a matter of efficiency. As a source   At this point, however, it is impossible to know
                         in the Venezuelan political opposition explained   whether GL 41 will be extended – or, indeed,
                         to Argus, Chevron has the advantage of being   whether the US government will determine that
                         able to access large amounts of Venezuelan   the Maduro regime has performed well enough
                         crude without engaging in production. It has   to warrant granting Chevron even more room to
                         a great deal of oil in its storage depots and can   resume work in Venezuela.  Chevron is laying
                         export it by sea relatively easily, said the source,   In the meantime, the US major has indicated   the groundwork
                         who is familiar with petroleum operations.  that it does intend to devote some attention to
                           “Chevron has enough inventories to send oil   its upstream assets and production facilities over   to resume active
                         to the US for the next six months” without tak-  the next few months, even as it works on moving
                         ing any extra steps, he added.       crude from storage depots to tankers. Sources   operations in
                                                              close to the matter told Reuters last week that
                         Six months                           Chevron executives were working with PdVSA  Venezuela more
                         This ought to be a sobering statement for Vene-  representatives to prepare for a meeting with   quickly in the
                         zuelan President Nicolas Maduro, given that GL   employees of the Petropiar joint venture to
                         41 has a limited lifespan.           address new management appointments and   event that more
                           The licence is only meant to remain valid   plans for operational improvements and main-
                         for six months, so it will come up for review in   tenance programmes.     sanctions relief
                         the spring of 2023. Washington might, in the-  Additionally, one of the sources said Chev-
                         ory, decide not to renew it if it determines that   ron was in talks with PdVSA on the possibility   is forthcoming
                         Caracas has not upheld the conditions that led   of expanding benefits and encouraging better
                         to its issuance – that is, conditions related to   performance at key facilities, including a crude
                         negotiations with the political opposition on   upgrader plant in the Orinoco River Belt. This
                         new elections.                       plant turns out a heavy crude blend that will be
                           If so – and if Argus’ source is correct in his   exported to the US by tanker, Reuters noted.
                         estimation of the size of Chevron’s inventories   Even so, these moves will not have any imme-
                         – GL 41 will expire around the same time that   diate impact on Venezuela’s actual oil produc-
                         the US company empties its storage depots.   tion levels. They will help lay the groundwork
                         Chevron will then be in the position of having   for Chevron/PdVSA joint ventures to resume
                         shipped a sizeable amount of Venezuelan crude   active operations more quickly in the event that
                         to the US in the first half of the year without   further sanctions relief is forthcoming, but they
                         needing to invest much time, effort or money   will not actually boost output – even if they do
                         in restarting production. Nor will it have had   boost exports. ™



































                                                     Petropiar develops heavy crude oil deposits in the Orinoco River Belt (Photo: PdVSA)



       Week 50   14•December•2022               www. NEWSBASE .com                                              P5
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