Chevron in talks to expand Venezuela role: Source

Chevron hopes to expand its exploration and production work in Venezuela after the US in May extended a waiver on sanctions that allow the US oil major to keep a minimal presence in the country, a company source told Argus.

The company is negotiating for expanding operations with the government of Venezuelan president Nicholas Maduro, which is seeking to ease US sanctions so it can sell more crude amid tighter global supplies, a Chevron employee said.

The idea of Chevron expanding its role has been on the table since March, when a US mission met in Caracas with Maduro. That was also when the Venezuelan oil chamber proposed that Chevron could act as an offtaker of any crude exports freed from sanctions to use in its refineries. PdV is the majority shareholder in a group of joint ventures with Chevron with assets in Venezuela.

The US-Maduro meeting had raised hopes that the US would soften sanctions in exchange for political concessions as war-related restrictions on Russia tightened global supply. But the idea faced a political backlash in the US, and requisite talks between Maduro and opposition leader Juan Guaido faltered.

Chevron would not confirm the discussions about an expanding role in Venezuela, but said it will continue to comply with the current sanctions framework provided by the US Office of Foreign Assets Control (OFAC).

Venezuelan oil production has been declining steadily since 1999, when Maduro's mentor and predecessor Hugo Chavez first took over as president. Output has dropped from 3.5mn b/d to about 700,000 b/d.

OFAC this week also renewed a license first granted in July 2021 allowing Venezuela to import LPG for humanitarian reasons, a move originally seen as a sign of flexibility towards the Maduro government. LPG is used in 90pc of Venezuelan households for cooking, according to figures from Caracas consultancy Gas Energy, and PdV struggles to produce enough to cover demand.

By Carlos Camacho