U.S. mulls extending Chevron’s Venezuela waiver, with more conditions

Ben Bartenstein and Saleha Mohsin October 18, 2019

WASHINGTON (Bloomberg) - The Trump administration is considering an extension of Chevron’s waiver to operate in Venezuela, albeit with even greater limitations, according to people familiar with the matter.

The 90-day sanctions reprieve would allow Chevron to continue its role as the last major U.S. oil producer in the nation beyond the Oct. 25 expiration date. Still, the Treasury Department wants to advance its “maximum pressure strategy” to further limit Venezuela’s crude production, the people said.

One of the people, all of whom were granted anonymity to discuss the deliberations, said on Friday evening that the decision-making process was in its final stages. Another person said that no final decision has been made and it was unclear whether other companies might receive a similar break.

The concern is that Chevron’s joint-venture projects in Venezuela are providing financing to help Nicolas Maduro’s regime pay back its debt to Russia’s state oil giant Rosneft PJSC, which could encourage more loans in the future. Still, there’s also a desire to maintain some American presence in the nation’s oil industry in the event of a political transition. The U.S. and nearly 60 countries recognize National Assembly President Juan Guaido as Venezuela’s rightful leader.

 “We are a positive presence in Venezuela, and we are hopeful that General License 8C is renewed so that we can continue operations in the country for the long-term,” Ray Fohr, a Chevron spokesman, said Friday night in a statement. “We have dedicated investments and a large work force who are dependent on our presence.”

The Treasury Department did not respond to a request for comment.

Chevron has operated in the South American nation for almost a century, since the discovery of the Boscan field in the 1920s. It has outlasted many other oil companies, including Exxon Mobil Corp., which left after a series of industry nationalizations during Hugo Chavez’s time as president.

Venezuela’s oil output has fallen from a high of 3.7 MMbpd in 1970 to less than 700,000 today, according to data compiled by Bloomberg.

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