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Venezuela opposition adds drag to sanction talks

  • : Crude oil
  • 22/10/20

Venezuela's opposition rejects any US easing of oil sanctions, even mild ones aimed at getting President Nicolas Maduro back to the negotiating table on free elections, sources close to talks this week told Argus.

The intractability on both sides and the reality that increasing crude output in Venezuela would require time and extensive overhauls of its neglected oil infrastructure are complicating any outlook for progress.

In meetings this week with US State Department officials in Washington, DC, representatives of the opposition led by Venezuelan opposition leader Juan Guaido were adamant in opposing any easing of sanctions. The US has considered using more flexible sanctions rules for Chevron as an initial incentive to begin talks on free and fair elections in Venezuela, according to sources.

"Guaido is torpedoing the deal," according to one Caracas-based analyst briefed on the discussions.

"That's why 'el juego está trancado,' " a Guaido aide told Argus, using a phrase from dominoes meaning the game cannot continue.

State department officials described yesterday's meeting with the opposition as an effort "... to reaffirm US support for a Venezuelan-led negotiated political and humanitarian solution to the country's crises."

"We remain a steadfast partner of the Venezuelan people as they seek to reclaim their democracy," assistant secretary for western hemisphere affairs Brian Nichols said.

Sources in Washington and Caracas familiar with the meeting described it as "tense," with the opposition upset with Chevron for its purported interest in extending what Guaido's allies view as a financial lifeline to Maduro's government. Chevron has lobbied for permission to restart exports from its joint ventures — any cash receipts would go to retire debt and pay for maintenance, domestic wages and taxes. The US has already cleared Italy's Eni and Spain's Repsol to trade Venezuelan crude through non-cash transactions, but Chevron still is not allowed to export any crude from Venezuela. The US earlier this year allowed Chevron to negotiate its future activities in Venezuela, without altering current prohibitions on crude exports.

Chevron has asked for modifications to the existing licenses that would give it more flexibility to plan and prepare to produce more oil in the future. The recent moves toward the possibility of sanctions relief has Chevron staff in Venezuela making specific plans to more than doubling output from its heavy crude PetroPiar project to 80,000 b/d and ramping up its mostly stalled PetroBoscan site to 120,000 b/d within a year if allowed.

Chevron told Argus this week there have been no changes to its existing Venezuelan licenses.

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