Chevron expects Venezuelan oil shipments, but PDVSA wants payments

Chevron expects Venezuelan oil shipments, but PDVSA wants payments

HOUSTON, Nov 28 (Reuters) – Chevron Corp (CVX.N) aims to start receiving shipments of Venezuelan oil as early as December after the oil company last week received a U.S. license to do so, but Caracas is unable to -be not as impatient as the United States. the sanctions restrict payments, people familiar with the matter said.

The United States on Saturday granted Chevron a six-month license to operate in Venezuela, reinstating its oil trading privileges, while preventing silver exchanges and requiring crude shipments to be routed to U.S. refiners.

Executives at Venezuela’s state-owned company PDVSA initially welcomed permission for a partial return to the United States, once the country’s most important market. They are less enthusiastic after learning of license terms that will not allow Chevron to reimburse operational costs or pay taxes and fees in Venezuela, the people say.

PDVSA and the Venezuelan oil ministry did not immediately respond to requests for comment.

As of November 23, Chevron’s largest oil joint venture in Venezuela had 1.79 million barrels of exportable crude in storage, according to a document seen by Reuters. Another oil processing project where it is a minority partner halted operations earlier this year due to accumulated inventory that could not be exported.

The hurdles could soon multiply: Another company with an outstanding debt of around $1 billion from Venezuela said on Monday it expected a similar consideration.

“If unsecured creditors can be repaid, then the US government should allow Crystallex, which is a secured creditor, to be repaid,” said Rahim Moloo, an attorney for mining company Crystallex International.

Any easing of Chevron’s license terms depends on progress in political talks between President Nicolas Maduro’s negotiators and the opposition that began in Mexico last week, a spokesman for the National Security Council said.

White House is ‘open to further calibration’ of sanctions, person added, but any easing depends on progress in agreeing Venezuelan election timetable, reinstatement of excluded candidates, return of political parties to leaders legitimate interests and access to international elections. observers.


Chevron had negotiated an agreement with PDVSA this year establishing that proceeds from oil exports would be distributed similar to past terms: approximately one-third each for debt repayment, operational expense reimbursement to partner PDVSA, and the final third for capital expenditure.

But Washington appeared to have approved only debt reduction and capital spending done directly by Chevron, leaving out taxes and royalty payments.

Washington also issued a separate six-month renewal for oil service companies to maintain operations without allowing them to drill, repair wells or contract additional personnel or services.

Chevron declined to comment on trade issues. A spokesperson for the US Treasury Department declined to comment.

The restrictions could ultimately limit any benefit to the South American nation’s oil production and exports, analysts have said, preventing further clearances from Washington from ongoing political talks in Mexico.

Earlier this year, U.S. officials stepped up efforts to encourage political dialogue and return some of the OPEC producer’s crude to markets affected by Russian supply cuts following its invasion of Ukraine.

These efforts have led to the release of Venezuelans convicted of drug charges in the United States and the return of Americans imprisoned in Venezuela. In addition, European oil companies Eni (ENI.MI) and Repsol have won US approvals to take Venezuelan crude for debt repayment.

Brokerage Credit Suisse said in a note on Monday that the initial easing of sanctions will have “little effect” on Europe’s supply risks due to sanctions on Russia.


Chevron’s Venezuelan oil shipments are at risk of seizure by creditors who have arbitration claims and court judgments, trade experts and lawyers said.

In addition to Crystallex, ConocoPhillips (COP.N) has a $1.2 billion decision against Venezuela and previously sought to seize the Caribbean assets of PDVSA. A spokesperson declined to comment, but the company said it would pursue its claims around the world.

PDVSA’s oil exports to the United States were halted in early 2019, following US sanctions aimed at ousting Maduro, whose 2018 re-election was branded a deception by most Western counties.

Washington recognizes opposition leader Juan Guaido as the legitimate leader. PDVSA’s largest foreign asset, Houston-based oil refiner Citgo Petroleum, is controlled by boards appointed by Guaido and ratified by a US court.

But Maduro retained his grip on power backed by the country’s military and allies, including Russia and Iran. It also controls PDVSA.

Washington has placed tight reins on oil imports to win support from a Congress skeptical of deals with Maduro. U.S. Senator Bob Menendez, chairman of the Senate Foreign Relations Committee, said on Saturday he supported “a negotiated solution to Venezuela’s protracted crisis,” but added that if Maduro tried again to use negotiations to win time, the United States and its partners “should roll back the full force of sanctions.”

Reporting by Marianna Parraga; additional reporting by Gary McWilliams and David Gregorio

Our standards: The Thomson Reuters Trust Principles.

Marianna Parraga

Thomson Reuters

Focused on energy, corruption and money laundering related sanctions with 20 years of experience in Latin America’s oil and gas industries. Born in Venezuela and based in Houston, she is the author of the book “Oro Rojo” about the ailing Venezuelan state company PDVSA and a mother of three boys.

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