PDVSA will assume control over oil production in Venezuela after Chevron’s operational license was revoked by the U.S. government. Following this, PDVSA plans to maintain crude output levels and redirect exports to non-U.S. markets. The decision reflects ongoing political tensions and sanctions affecting the Venezuelan oil industry.
PDVSA, Venezuela’s state-owned oil company, will independently manage crude production from its joint ventures with Chevron after the U.S. revoked Chevron’s operational license in Venezuela. This decision is backed by a PDVSA document obtained by Reuters, following U.S. President Trump’s cancellation of a sanction waiver allowing Chevron to return to the Venezuelan oil market.
In February, President Trump outlined his reasons for the waiver’s cancellation, citing the Venezuelan government’s failure to implement electoral reforms and inadequate measures concerning migration. He remarked, “We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro on the oil transaction agreement… which have not been met by the Maduro regime,” sharing this on Truth Social.
The U.S. Treasury has instructed Chevron to conclude its operations and exports in Venezuela by April 3, 2023. Previously, Chevron was exporting approximately 200,000 barrels per day (bpd) of heavy crude to the U.S. under the sanction waiver established in 2022. With the waiver rescinded, Chevron’s exit marks a strategic transition for PDVSA.
In anticipation of this shift, PDVSA has developed three production scenarios post-April 3, targeting a range of 105,000 to 138,000 bpd of Hamaca heavy crude from the Petropiar site in the Orinoco Belt, consistent with recent output levels. The company plans to allocate part of the crude for domestic refining and export the remainder to non-U.S. markets.
Moreover, PDVSA aims to enhance the supply of diluents needed for upgrading heavy crude to ensure smooth pipeline transportation. The organization’s priority remains to maintain production levels at Petropiar to prevent the shutdown of the heavy crude upgrader and oilfields, as confirmed by a source familiar with PDVSA’s strategic plans.
PDVSA’s takeover of Chevron’s operations in Venezuela follows the U.S. government’s decision to revoke the license allowing Chevron to operate in the country. With planned production scenarios that maintain crude output levels, PDVSA aims to secure its oil production capacity while adjusting export strategies. This marks a significant shift in Venezuela’s oil landscape amidst ongoing governmental challenges.
Original Source: oilprice.com
