Venezuela talks inch toward election deal

Government and opposition have started discussions, but Caracas threatens to seize oil assets as a US sanctions deadline looms

Venezuela's government and its US-backed opposition are inching towards an agreement on holding presidential elections in nine months' time, but initial negotiations in Barbados paused far from healing the Opec country's divisions.

Diosdado Cabello, president of the constituent assembly (ANC) — established in 2017 to effectively bypass the opposition-controlled legislature — declares that President Nicolas Maduro will not step aside to allow new elections next year. "The only elections that could be held in 2020 are national assembly elections," Cabello says, referring to the legislature that most western countries deem the last democratically elected body in Venezuela. His remarks appear to undercut the talks brokered by Norway in Barbados this month between representatives of Maduro and opposition leader Juan Guaido. But a Guaido aide says that the negotiations made progress towards elections without Maduro, and government officials echo that view.

The government delegation's agenda included the possibility that Maduro would not stand as a candidate in elections, but would handpick his potential successor. And it included the appointment of new authorities to the national electoral council (CNE) by joint consensus, combining new presidential and national assembly elections, the release of up to 800 political prisoners and the lifting of US sanctions on state-owned oil firm PdV and government officials.

Guaido maintains that the assembly should complete its constitutional term, meaning new legislative elections would not take place until the first week of December 2020. The opposition's main demand is Maduro's immediate resignation, making way for a transition government headed by Guaido ahead of presidential elections in nine months. Other key priorities are an overhaul of the CNE, the dissolving of the ANC and the release of all political prisoners.

The Barbados talks promoted by the EU were a blow to Washington, which has been tightening sanctions on Venezuela since January in a bid to force Maduro out of power and has warned against any negotiated deal that leaves Maduro or his associates in place. Caracas threatens to nationalise US major Chevron's oil assets if Washington declines to extend a sanctions waiver expiring on 27 July.

Waiver goodbye

The waiver — issued by the US Treasury on 28 January — allowed Chevron and US oil service companies to continue some operations with Venezuelan state-owned oil firm PdV. But if the Trump administration allows the waiver to lapse, forcing Chevron and the oil service companies to pull out, Maduro is likely to seize the assets and offer Russian, Chinese and other non-US oil firms an "opportunity to acquire" them, a presidential palace official tells Argus.

Chevron is PdV's main western partner in Venezuela. It is a 30pc shareholder in the PetroPiar integrated Orinoco heavy crude project, which PdV is transitioning to use for crude blending. Chevron has a 39.2pc stake in PetroBoscan, which operates the legacy Boscan heavy oil field in Zulia state, and a 25.2pc interest in PetroIndependiente, which operates the LL-652 medium oil field in Lake Maracaibo. Orinoco's 400,000 b/d Petroindependencia extra-heavy crude joint venture, in which Chevron holds a 34pc stake, is in the early development stage.

The firm also has a 60pc stake in the Loran offshore gas field, which holds 7.3 trillion ft³ (207bn m³) of estimated reserves and forms a single cross-border field with Trinidad and Tobago's Manatee field, which holds a further 2.7 trillion ft³. Chevron's net Venezuelan offtake was just 42,000 b/d of crude and 9mn ft³/d (93mn m³/yr) of natural gas last year. But the potential for growth is huge, positioning the company to play a key role in any reconstruction.

Venezuelan crude output