Venezuela oil company PDVSA readies return to work under previous US terms
Washington is preparing new authorizations for key PDVSA partners, starting with U.S. major Chevron (CVX.N), opens new tab, to operate in the sanctioned nation. The permits are expected to mark a policy shift from a pressure strategy Washington adopted this year that led to oil license cancellations in March.
The authorizations might not be made public this time, but Venezuela's President Nicolas Maduro, late on Thursday, hailed political work to keep Chevron in the country and said the company was involved in working groups to expand operations again.
Since the U.S. first imposed energy sanctions in 2019, Venezuela has seen licenses come and go as part of political negotiations with different U.S. administrations.
The OPEC country has stabilized production at around 1 million barrels per day in recent years, with exports mostly going to independent Chinese refiners. A separate secondary tariff announced by Washington this year on buyers of Venezuelan oil has not been enforced.
If the licenses are granted again under terms allowing PDVSA's partners to contribute to procurement and contract payments, while importing and exporting oil through swaps, Venezuela could secure a much-needed revenue source.
The authorizations would come after a prisoner swap between Venezuela and the U.S. this month.
The U.S. State Department has said no money from Venezuelan exports will reach Maduro's coffers, but it remains unclear how that prohibition could be enforced. Historically, PDVSA has not allowed its partners' cargoes to depart without receiving mandatory royalties and tax payments.
"The situation is not going to be different this time," a company source said, referring to PDVSA's preparations.
PDVSA and Venezuela's Oil Ministry did not reply to requests for comment. Chevron said it conducts its business globally in compliance with applicable laws and regulations, including the U.S. sanctions framework.
PDVSA's previous arrangement with Chevron involved a three-leg swap, with the U.S. firm supplying diluents to PDVSA and the state company delivering oil cargoes for Chevron to export to the U.S. to get debt and dividends repaid, one of the sources explained.
The arrangement with European companies, including Italy's Eni (ENI.MI), opens new tab, Spain's Repsol (REP.MC), opens new tab and France's Maurel & Prom (MAUP.PA), opens new tab was slightly different.
Since debt owed to those firms was lower, the swaps were almost completely oil-for-fuel exchanges with a minimum amount of debt repaid, the source added.
PDVSA sees no other mechanism to resume oil exports to the U.S. and Europe under the U.S. sanctions, the sources said.
In April, PDVSA canceled oil cargoes it had assigned to Chevron after the companies could not agree on a payment solution.
Washington's new approach to energy sanctions on Venezuela has again divided the country's opposition, with some leaders celebrating Chevron's return to full operations and others warning it could benefit Maduro.
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