The US has given Chevron limited authorization to resume pumping oil from Venezuela after announcing on Saturday that the Venezuelan government and the opposition group had reached an agreement on humanitarian assistance and on a solution to the chronic economic and political crisis country’s crisis, including a focus on the 2024 elections.
A senior Biden administration official described Saturday’s announcements as “major steps in the right direction,” but noted there is still work to be done as both parties work toward a more lasting resolution to the ongoing crisis. The official also highlighted the limited nature of the license, saying they do not anticipate it will have a tangible impact on international oil prices and that the move is intended as a stimulus to negotiations – not in response to high global oil prices .
The Treasury Department’s Office of Foreign Assets Control on Saturday issued General License 41 for Venezuela, which authorizes Chevron to “resume limited natural resource extraction operations in Venezuela,” according to a Treasury Department press release. This is a 6 month license revocable by the US at any time. Additionally, any profits made will be used to repay debts owed to Chevron and not the Maduro regime, the senior official said, explaining that the US government will continue to require Chevron to provide comprehensive reporting on its financial operations.
“GL 41 only authorizes activities related to Chevron’s joint ventures in Venezuela and does not authorize other activities involving PdVSA. Other sanctions and restrictions imposed by the United States related to Venezuela remain in place; The United States will vigorously enforce these sanctions and will continue to hold accountable any actor who engages in corruption, violates US law or violates human rights in Venezuela,” the release said. PdVSA is the state-owned Venezuelan oil and gas company.
Chevron CEO Mike Wirth told Bloomberg TV earlier this year that a thaw would take months and years to clean up the country’s oil fields and there would be “no immediate” impact on oil production.
According to the official, if the Venezuelan regime continues to take concrete steps towards a negotiated solution, targeted easing of sanctions will be possible in the future.