U.S. grants Chevron license to drill for oil in Venezuela


The Biden administration said on Saturday it would lift a key oil sanction on Venezuela, marking the first major breakthrough in a years-long U.S. embargo that could eventually help ease strained global energy markets.

Chevron, the only U.S. oil company active in Venezuela, is part of a joint venture with the country’s state oil company but has been banned from doing business in Venezuela because of sanctions. It will be able to resume pumping under a new permit from the Treasury Department. The limited license states that any oil produced can only be exported to the United States. Any profits from its sale cannot go to Venezuelan state companies but must be used to repay Venezuelan creditors in the United States.

The move comes as Nicolás Maduro’s government holds its first formal talks with Venezuela’s opposition coalition in more than a year. Meeting in Mexico City on Saturday, the two sides agreed to ask the United Nations to manage billions of dollars in government funds held by foreign banks that would be unfrozen to help ease the humanitarian crisis in Venezuela.

Negotiators also agreed to continue talks next month to discuss the timetable for “free” elections in 2024 and human rights issues.

“We have made clear early on that we believe the best solution for Venezuela is a negotiated solution among Venezuelans,” said a senior Biden administration official, who requested anonymity under White House rules. “To encourage this, we have also expressed our willingness to provide targeted sanctions relief.”

The policy is “open to further adjustments to the sanctions,” the official said. “But any additional action will require additional concrete steps,” including the release of political prisoners and recognition of the legitimacy of the opposition, as well as unrestricted access for UN humanitarian missions.

The official dismissed reports that the government was moving to ease oil shortages and high energy prices exacerbated by Russia’s invasion of Ukraine. “Allowing Chevron to start refining oil from Venezuela will not affect international oil prices. This is really about Venezuela and the process in Venezuela,” the official said, adding that the U.S. is “supporting a peaceful, negotiated solution to the political, humanitarian and economic crisis.” .”

Venezuela has the world’s largest oil reserves, slightly more than Saudi Arabia, but its dense crude is harder to extract. But due to government mismanagement, its production stalled even before Maduro took over in 2013 after the death of former military officer Hugo Chavez, elected in 1998.

U.S. sanctions on Venezuela began 15 years ago, citing drug trafficking, corruption and human rights abuses, and have gradually widened, peaking under Donald Trump. Trump has sharply tightened measures against the state oil company Petróleos de Venezuela, SA, or PDVSA; the central bank; and individuals and companies. The activities of American oil companies there are almost completely banned.

The sanctions are meant to stem revenues from global oil sales, where production has plummeted as black market exports go mostly to China and India. When the Venezuelan opposition declared the December 2018 elections illegal, it recognized parliamentary opposition leader Juan Guaido as interim president. The United States quickly followed suit, recruiting dozens of other Latin American countries to do the same.

But economic and political pressure on Maduro has had little effect, with Venezuelans bearing the brunt of the recession and a crackdown that has sent millions fleeing to neighboring countries and the United States, where Venezuelan refugee numbers are surging.

President Biden came into office convinced that Trump’s Venezuela policy had failed, but he has done little to reverse that as powerful lawmakers vow to block any action and the government remains hopeful of winning opposition to Maduro. Venezuelans and other Latinos vote Florida in the midterms. As recently as this summer, Biden called Guaido to assure him that the United States would continue to recognize and support him, even as other governments and members of Guaido’s own opposition coalition were turning their backs on him and calling for talks with Maduro .

The GOP’s electoral defeat in Florida appeared to convince the administration that it was time to act. Chevron officials said it will take some time to resume operations in Venezuela.

The sanctions change appears to be a clever sidestep of the main complaint of US critics – that Maduro’s government could directly benefit. Under the terms of the license, PDVSA will be cut off from any profits it may have made from its joint venture with Chevron.

But Maduro is no worse off than he is now, and one rift in sanctions could lead to others. For the government, any easing of global energy supply is seen as a positive, assuming talks with the opposition continue toward democratic elections and improved human rights.

In a statement Saturday about resuming talks in Mexico, the senators. Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.), a longtime Venezuelan hardliner, said, “If Maduro again tries to use these negotiations to buy time and further entrench his criminal dictatorship, the United States, our international Partners must quickly restore the full force of our sanctions that brought his regime to the negotiating table in the first place.”

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