U.S. Extends Chevron's License to Operate in Venezuela
26 Julio 2019 - 3:28PM
Noticias Dow Jones
By Bradley Olson and Ian Talley
The Trump administration extended a license to let Chevron Corp.
remain in Venezuela until late October, siding with officials who
argued that the company's absence would put U.S. energy companies
at a disadvantage and not significantly advance Washington's goal
of ousting Venezuela's president.
The license allowing Chevron and several oil-field services
companies to continue operating in the country was set to expire on
Saturday, sparking considerable debate within the U.S.
administration over whether to extend it, people familiar with the
matter said.
Some U.S. officials see a Chevron departure as an essential step
in the American-led effort to use economic pressure and isolation
to force out Venezuelan President Nicolás Maduro. Others worry that
Chevron's departure could lead to a greater role for Chinese and
Russian operators in the country, and make it harder for American
companies to regain a foothold in the future.
U.S. officials ultimately decided to let Chevron remain in
Venezuela, where it has operated for nearly a century, until Oct.
25. Chevron's mandate, which had already been extended six months
earlier this year, could later be further extended.
Chevron pushed for license renewal, with spokesman Ray Fohr
saying earlier this week that the company was hopeful it would be.
"We are a constructive presence in the country," he said. Chevron
on Friday said its Venezuela operations "continue in compliance
with all applicable laws and regulations."
Chevron operates a number of projects jointly with Venezuela's
state oil company, Petróleos de Venezuela SA, or PdVSA, that have
managed to maintain production levels even as output has fallen in
other areas. For years, the joint operations with Chevron and other
companies have been a critical cash lifeline for the country.
Chevron's share of production from Venezuela was 44,000 barrels
of oil and gas a day last year, less than 2% of its global output
total.
U.S. sanctions have had a punishing effect on Venezuela's oil
industry, with production falling by almost half since January to
an estimated 690,000 barrels a day, according to the U.S. Energy
Information Administration.
Venezuela is in the throes of a humanitarian crisis driven by
poor economic management, corruption and U.S. sanctions that have
all led to precipitous economic decline and runaway inflation.
Violence and shortages of food and medicine have prompted a mass
exodus to other countries.
The U.S. Treasury Department didn't immediately respond Friday
to questions on why it chose a shorter timeline than the first
license, or the optics of giving some U.S. companies access to
Venezuelan oil while barring others.
But Secretary of State Mike Pompeo, when asked about the pending
license decision Thursday, pointed to a key objective for the
administration in the pressure campaign.
"We're trying to ensure that there aren't wealth and resources
that are getting into the pocket of Maduro and his cronies and
flowing to the Cubans," he said.
Allowing Chevron and the four oilfield service companies
including Halliburton Co. and Schlumberger Ltd. to remain in
Venezuela also gives the U.S. a window into the state of oil
production in the country, and thus, how much money the government
still has coming into its coffers. That is critical to
understanding the regime's potential staying-power, and is also a
way to see whether revenue from PdVSA are being diverted due to
corruption, as former officials at the state oil company have
previously alleged.
The office of Venezuela's U.S.-backed opposition leader, Juan
Guaidó, vowed Monday to preserve Chevron's legal right to its
assets in the event that the company is forced to exit from the
country.
Clearview Energy Partners LLC said in a note to clients that it
doesn't rule out further extensions. But the analysis firm added
that the White House may be more willing to let the license lapse
as the 2020 presidential election approaches, noting that
conservative Cuban-American voters in Florida see pressuring Mr.
Maduro as a way to antagonize Havana.
--Rebecca Elliott contributed to this article.
Write to Bradley Olson at Bradley.Olson@wsj.com and Ian Talley
at ian.talley@wsj.com
(END) Dow Jones Newswires
July 26, 2019 16:13 ET (20:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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