Following an agreement with state-run PDVSA to restructure joint ventures in the sanctioned nation, Chevron (NYSE:CVX) has requested the U.S. government to extend its license to operate there, according to Reuters on Thursday.
The U.S. Treasury Department’s Office of Foreign Assets Control has reportedly requested Chevron (CVX) for clarity and details of the transaction with PDVSA after the Biden administration earlier this year granted the business authorization to talk with Venezuelan officials.
Millions of barrels of Venezuelan oil are at risk because they might assist replace Russian supplies that the United States and other European nations have prohibited as a result of the invasion of Ukraine.
An enlarged license would also enable the company (CVX) to recover some of the unpaid obligations owed by its four joint ventures in the nation, which total billions of dollars.
Despite the fact that the external environment will continue to be difficult, Vladimir Dimitrov argues in a positive analysis recently published on Seeking Alpha that Chevron (CVX) is “a great long-term investment.”
The Chevron-PDVSA agreement comprises a comprehensive overhaul of the operations of their four projects. It offers to restart Petroboscan’s Joint oil production, which was recently halted owing to operational obstacles, according to two of the sources. This involves a crude-for-diluents swap to assist heavy oil processing for export at the significant Petropiar venture in the Orinoco Belt.
Another person added, “Chevron wants to have more control over the ventures’ employment of personnel and oil trading.” The source continued, “From PDVSA’s perspective, the projects will continue to be its business units, so it will pick their managers.”
Even if short-term legal changes to the partnership’s stakeholding are not anticipated, PDVSA has agreed to rely on the company for important operational decisions, according to the sources.
When asked about talks with Chevron this week, Venezuela’s oil minister, Tareck El Aissami, responded, “The ball is in the U.S. government’s court.” Everything pertaining to the immediate restoration of operations has been discussed and approved by Chevron.
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