Chevron Allowed To Maintain Venezuela Operations, But Denied Drilling: WSJ

The U.S. extended a limited license held by Chevron Corporation CVX, allowing it to maintain its operations in Venezuela and negotiate future business.

Previously the company couldn't directly negotiate with any officials sanctioned by the U.S., Wall Street Journal writes. The U.S. didn't expand the license to allow Chevron to drill for and market Venezuelan crude as the company had hoped. 

Chevron has been lobbying the U.S. to permit it to drill for crude and sell to help bring down energy prices after the Russian invasion of Ukraine.

Also Read: US Could Ease Venezuela Sanctions Conditional On Direct Oil Supply: Reuters.

A Biden administration official said that as part of the moves, the U.S. would also remove Carlos Erik Malpica-Flores, the nephew of Venezuela's first lady and a former top PDVSA official, from a list of sanctioned individuals. 

Maduro, who has been indicted in the U.S. on narco-terrorism charges, has a $15 million reward for his arrest or capture.

Earlier this year, Chevron executives told Biden administration officials they could help double Venezuela's roughly 800,000 barrels-a-day production within months, helping to replace the loss of about 700,000 barrels a day the U.S. was importing from Russia before the Ukraine war.

Other analysts believe that Chevron's short-term projections of production increases are wildly optimistic. "Venezuela can only add 150,000 to 200,000 barrels per day in the next six months," said Francisco Monaldi, the Latin America Energy Program director. "It would have no impact on the world market or the U.S. price of gasoline."

Price Action: CVX shares are down 0.59% at $173 during the premarket session on the last check Wednesday.

Photo via Wikimedia Commons