Page 5 - LatAmOil Week 50 2022

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