PDVSA to Assume Control of Chevron Operations in Venezuela Following License Revocation

PDVSA will take over crude production from Chevron in Venezuela following the revocation of Chevron’s operational license by the Trump Administration. This decision is aimed at maintaining production levels and includes strategies for domestic refining and international exports.

The state-owned oil company of Venezuela, PDVSA, will manage crude production independently from its joint partnerships with Chevron following the cancellation of Chevron’s operational license by the Trump Administration. This decision is based on recent developments reported by Reuters regarding PDVSA’s documentation.

In late February, President Trump revoked a waiver that previously allowed Chevron to operate and assist in raising oil production in Venezuela, citing the nation’s inadequate electoral reforms and issues concerning migration. Trump articulated his stance on social media, criticizing the concessions made by the Biden administration to Nicolás Maduro regarding oil transactions.

Following the revocation, the U.S. Treasury has stipulated that Chevron must gradually cease operations and exports in Venezuela by April 3. Until now, Chevron has been exporting approximately 200,000 barrels per day of heavy crude oil from Venezuela to the U.S. under the waiver granted in 2022.

As PDVSA prepares for the post-Chevron operations, it has devised three production scenarios expected to maintain output between 105,000 and 138,000 barrels per day at the Petropiar site in the Orinoco Belt. This strategic move aims to sustain production levels seen in previous months, primarily to avert shutting down the heavy crude upgrader or oilfields.

PDVSA plans to allocate a portion of Hamaca crude for domestic refining while intending to export the surplus to markets outside the U.S. Moreover, the firm is working on enhancing the supply of diluents needed for the heavy crude to be pumped through pipelines. A source familiar with PDVSA’s objectives confirmed that maintaining operational stability remains a top priority for the company.

In conclusion, PDVSA’s assuming control over oil production in Venezuela after Chevron’s withdrawal highlights the complexities of geopolitical influences on the oil industry. The Venezuelan firm seeks to stabilize production levels while navigating the shifting landscape of international sanctions imposed by the U.S. government. The operational adjustments signify significant changes in how Venezuela will manage its oil resources moving forward.

Original Source: oilprice.com