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OilMonster
Crude Oil November 24, 2022 02:14:00 AM

U.S. Prepared to Authorize Chevron to Boost Venezuela’s Oil Output

Anil
Mathews
OilMonster Author
Chevron declined to comment on the pending approval or terms.
U.S. Prepared to Authorize Chevron to Boost Venezuela’s Oil Output

SEATTLE (Oil Monster): Chevron Corp could soon win U.S. approval to expand operations in Venezuela and resume trading its oil once the Venezuelan government and its opposition resume political talks, four people familiar with the matter said on Wednesday.

A U.S. authorization for Chevron to help rebuild the country's sagging oil production was one of the biggest plums for bringing about talks between the Venezuelan government and its opposition.

U.S. officials this year sought to smooth a return to negotiations between socialist President Nicolas Maduro and the country's opposition by offering a slight easing of sanctions and releasing some Venezuelans in U.S. jails.

Both Venezuelan parties and U.S. officials are pushing to hold talks in Mexico City this weekend, the people said, the first since October 2021. Maduro gained clout this year with newly elected leftist leaders in Brazil and Colombia and the opposition's weakening support.

Chevron declined to comment on the pending approval or terms. The No. 2 U.S. oil firm remains in compliance with terms of its existing license, a spokesperson said. A license allowing maintenance operations expires Dec. 1.

The terms readied for approval will prevent Venezuela's state-run oil firm PDVSA from receiving proceeds from Chevron's oil sales. And they will cut "the use of corrupt shadow firms that control the flow of Venezuela oil to countries like China," said a person familiar with the matter in Washington.

White House officials aim to "shift oil sales from illicit and non-transparent channels to transparent, legitimate channels," the person said. The United States could revoke permissions if the Maduro administration fails to negotiate in good faith or uphold its commitments, that person said.

"We have long made clear our willingness to provide targeted relief based on concrete steps that alleviate the suffering of the Venezuelan people and bring them closer to a restoration of democracy," said a spokesperson for the U.S. State department.

U.S. President Joe Biden's administration has reason to grant Chevron a wider operating license with U.S. shale production gains slowing, Russia's oil exports shrinking under sanctions and Saudi Arabia signaling possible OPEC output cuts.

The United States this year has kept oil prices from soaring by releasing more than 200 million barrels of the nation's emergency oil reserves. But those releases are due to end soon.

Courtesy: www.reuters.com