The Trump administration is set to pressure more companies to cease operations in Venezuela, following Chevron’s order to withdraw. Companies like Etablissements Maurel & Prom SA may have just 30 days to comply. This could significantly impact Venezuela’s economy and further strain President Maduro, as the U.S. seeks to negotiate democratic reforms. Despite the potential turmoil, Maduro claims the output consequences will be minimal.
The Trump administration is reportedly preparing to compel additional companies to cease operations in Venezuela, following the order for Chevron Corp. to withdraw. Insiders have indicated that companies such as French oil producer Etablissements Maurel & Prom SA and a Florida-based asphalt firm owned by Harry Sargeant have been notified that they would have 30 days to conclude their operations after the revocation of their existing waivers. This action could be initiated by the U.S. Treasury as early as Friday.
This move aims to further strain the already distressed Venezuelan economy and exert additional pressure on President Nicolas Maduro. The administration seeks to leverage these sanctions to negotiate democratic reforms and increased acceptance of Venezuelan migrants in the U.S. Notably, the Treasury has given Chevron a deadline of April 3 for the cessation of its operations in Venezuela, significantly shorter than the customary six-month notice period.
The Venezuelan economy’s substantial reliance on oil has made Chevron and other smaller companies critical players in maintaining economic activity, especially given the failures of the state oil company due to years of underfunding. In light of potential waiver revocations, companies like Spain’s Repsol SA and Italy’s Eni SpA also await clarification regarding their operational status in Venezuela.
Joint ventures between Chevron and Petroleos de Venezuela SA account for a considerable fraction of Maduro’s regime revenues for 2023 and 2024. Analysts estimate that the absence of Chevron could lead to a contraction of up to 7.5% in Venezuela’s economy this year. In recent diplomatic initiatives, Trump advisor Rick Grenell visited Maduro, facilitating the release of U.S. prisoners and resuming deportation flights, which contributed to the return of 166 migrants from the U.S. to Venezuela.
Despite the looming sanctions, President Maduro has attempted to mitigate concerns, asserting that the cessation of Chevron’s activities would not significantly impact oil output, claiming that “output will not even fall one liter or barrel.”
In summary, the U.S. administration may soon implement sanctions that will force more companies to halt their operations in Venezuela, significantly affecting the nation’s economy. This initiative aims to apply pressure on President Maduro while addressing issues of democratic reforms and migration. The implications of these sanctions could lead to substantial economic decline, particularly with the anticipated withdrawal of key players such as Chevron from the Venezuelan oil industry, historically critical to the nation’s revenue.
Original Source: www.business-standard.com
