Page 5 - LatAmOil Week 48 2022

LatAmOil COMMENTARY LatAmOil

The statement stressed that GL 41 had been demands, which is the complete lifting of all
issued in response to the Maduro regime’s agree- sanctions and measures on the national oil
ment to resume discussions with Venezuela’s industry,” Maduro was quoted as saying in a
main opposition body on a new election deal. company press release. “Venezuela has the
“On November 26, the Unitary Platform and the right to economic and production freedom. An
Maduro regime announced the resumption of attempt is being made to mount a neocolonial
talks in Mexico City; a humanitarian agreement model on us, where a foreign country executes
focused on education, health, food security, sanctions and tells the rest of the world that
flood response and electricity programmes that another country cannot sell or produce oil.”
will benefit the Venezuelan people; and agree- The Venezuelan president also asserted his
ment on the continuation of talks focused on the country’s right to do as it pleased with its own
2024 elections,” it said. resources.
It also emphasised that official US policy was Washington does not have the right to try to
to make sanctions relief conditional on progress keep Caracas from taking its place at the table
toward a deal on elections between the govern- among other global oil producers, he said.
ment and the opposition. “Taking the company away from us and tak-
ing Venezuela out of the world’s energy circuit
First take in Caracas was a terrible, extremist idea of Donald Trump,
The Treasury Department’s announcement met and they are paying for it, because Venezuela
with an enthusiastic reception in Caracas. has the largest reserve in the world and the
On November 29, Venezuela’s Petroleum fourth-largest gas reserves,” he declared. “They
Minister Tareck El Aissami wrote in a Twitter cannot take us out, sooner or later we will be an
post that he was holding a working meeting with oil and petrochemical power.”
Javier La Rosa, the president of Chevron Ven- He added: “Our oil is not an ideological-po-
ezuela. He noted that the US major had been litical issue. It is a free resource. We produce it
active in Venezuela for a century and said he and sell it to those who need it, not to those who
expected the meeting to be fruitful. think like us – yes, at fair prices based on con-
His words were exultant: “In the coming tracts that respect our legislation.” GL 41 does place
hours, we will sign contracts to promote the certain limits on
development of joint ventures and oil produc- Chevron’s take: Caution
tion; as we have always done, in the terms estab- In the meantime, Chevron is saying that it has Chevron’s ability
lished in the Constitution and other Venezuelan limited expectations for its initial return to Ven-
laws. NOW TO PRODUCE!!!” ezuela – which could, after all, be last for as little to operate in
The following day, Maduro added in a sepa- as six months, as that is the term of GL 41.
rate Twitter post that El Aissami expected all of Technically, the timespan involved could be Venezuela
the contracts between PdVSA and Chevron to even shorter, as it could be terminated any time.
be signed within the next few days. But even if the US major remains active in the
South American state for the entire six months,
Second take: Reading the fine print it remains to be seen how much it accomplishes.
This optimistic tone did not last. Somewhere Michael Wirth, the CEO of Chevron, said at the
along the line, officials in Caracas must have Economic Club of New York earlier this week
noticed that GL 41 did not just wave Chevron that he did not expect his company to accom-
ahead, giving it carte blanche to proceed with plish much in the way of new drilling this year.
business as usual; rather, it placed certain limits “We’re not likely to be coming in with invest-
on the US major’s ability to operate in Venezuela. ment in a drilling campaign that grows produc-
For example, the statement says explicitly tion in the next six months,” he commented.
that Chevron’s re-entry cannot result in PdVSA “There’s a lot of work that has to be done ... to
receiving any profit as a result of sales of Ven- allow us to move in that direction.”
ezuelan oil. It continues: “GL 41 authorises Wirth’s caution probably does not stem not
activity related to Chevron’s joint ventures in from concern about criticism, even though the
Venezuela only and does not authorise other deal has drawn some opposition in the US, with
activity with PdVSA. Other Venezuela-related members of the Republican Party faulting Biden
sanctions and restrictions imposed by the for being willing to work with Maduro’s admin-
[US] remain in place; the [US] will vigorously istration. Instead, it is more a product of caution
enforce these sanctions and will continue to – and the understanding that it will take time
hold accountable any actor that engages in cor- to bring Venezuela’s long-neglected and inad-
ruption, violates US laws or abuses human rights equately repaired production, processing and
in Venezuela.” transportation infrastructure back into action.
Those provisions of the document appear Nevertheless, the Chevron head is right to be
to have roused Maduro’s ire. On December 1, cautious. Maduro’s frustration with US efforts
the Venezuelan president was quoted in a press to keep profit out of the hands of PdVSA could
release as saying that while he appreciated the lead to squabbling over GL 41. If it does, the US
partial lifting of trade restrictions, the US was major will be sure to bear the consequences of
overstepping its bounds by seeking to constrain that squabbling – and it will end up needing
PdVSA’s finances. even more time to carry out repair and main-
“They are going in the right direction, tenance work in Venezuela before it can start
but they are not enough for what Venezuela production. ™

Week 48 30•November•2022 www. NEWSBASE .com P5