Chevron License Cancellation Could Initiate New Oil Export Negotiations in Venezuela

The U.S. government has terminated Chevron’s operating license in Venezuela, which could lead to new negotiations for oil exports with the state-owned PDVSA. President Trump cited Maduro’s inadequate reforms as the reason for the license cancellation. Meanwhile, imported Venezuelan crude remains critical for U.S. refineries, prompting concerns about energy supply and market dynamics. Companies like Repsol and Eni are also involved with Venezuelan oil under U.S. authorizations.

The recent cancellation of Chevron’s license to operate in Venezuela by the U.S. government could pave the way for new negotiations regarding crude oil exports. The U.S. producer may seek to establish an export agreement with the Venezuelan state oil company, PDVSA, focusing on markets beyond the U.S. This information was reported by Reuters, citing anonymous sources.

U.S. President Donald Trump announced the cancellation, attributing it to President Nicolas Maduro’s insufficient progress on electoral reforms and the repatriation of migrants. U.S. Secretary of State Marco Rubio has declared on social media platform X his intent to end oil and gas licenses for any companies operating in Venezuela, accusing them of supporting the Maduro regime.

As of Thursday morning, the U.S. Treasury Department had yet to release any specific terms for the license cancellation or provide deadlines for ceasing Venezuelan oil exports. Notably, oil shipments that were arranged by Chevron continued to depart Venezuelan ports for the U.S., as indicated by vessel monitoring data and PDVSA’s internal records. Maritime sources confirmed that there were no instructions issued to slow down or redirect tankers.

In addition to Chevron, companies such as Repsol, Eni, and Maurel & Prom hold U.S. authorizations to engage with Venezuelan crude. Chevron is currently assessing the implications of this decision, while Repsol, Eni, and Maurel & Prom have not provided comments on the situation. Chevron’s license has been subject to automatic renewal since November 2022.

In 2022, Chevron’s joint ventures were responsible for approximately 25% of Venezuela’s total oil production, solidifying the country’s position as the fourth-largest crude supplier to the U.S. Following the announcement, spot prices for a major medium crude grade on the U.S. Gulf Coast significantly increased, as refiners sought alternative sources, including Colombian, Ecuadorean, and Guyanese grades.

Venezuelan crude represented 13% of the U.S. Gulf Coast refinery imports last year, according to the U.S. Energy Information Administration. Separately, Trinidad and Tobago intends to seek an extension of a U.S. license for Shell and the National Gas Company to further develop the Dragon gas project in Venezuela. This license, issued in early 2023, allows for project planning to supply gas to Trinidad by 2027, with amended terms allowing payments to Venezuela and PDVSA in hard currency or in kind until October 2025.

The cancellation of Chevron’s license could initiate new negotiations for crude oil exports from Venezuela, potentially altering U.S.-Venezuela energy dynamics. As the U.S. government continues to scrutinize companies operating in Venezuela, Chevron and others navigate their business options carefully. The situation remains fluid as stakeholder reactions unfold. Moreover, the continued demand for Venezuelan oil and its significant contribution to U.S. refinery imports underscore the complexities of U.S.-Venezuela relations and the broader implications for energy markets.

Original Source: www.offshore-technology.com