As Chevron prepares to exit Venezuela, Nicolás Maduro invites foreign oil companies to invest, despite looming U.S. sanctions. The Trump administration has revoked Chevron’s license, affecting its operations and raising concern over U.S. sanctions indicating a crackdown on non-U.S. companies too. The outcome of these developments could significantly impact Venezuela’s oil production and the regime’s finances.
As U.S. oil giant Chevron prepares to exit Venezuela, President Nicolás Maduro is actively inviting foreign oil companies to establish operations within the country. This initiative coincides with recent actions by the Trump administration aimed at escalating sanctions against Venezuela’s oil sector, raising questions about the practicality of Maduro’s overtures.
The Trump administration recently terminated the license allowing Chevron to sell Venezuelan oil in the U.S., giving the company until April 3rd to cease operations. Previously issued by the Biden administration in November 2022, this license enabled Chevron to operate amidst ongoing sanctions against Maduro’s regime, thus playing a pivotal role in Venezuela’s oil production. With Chevron producing approximately 220,000 barrels per day, accounting for around 24% of Venezuela’s output, its departure is significant.
Amid pressure from the Trump administration’s return to a “maximum pressure” stance against Venezuela, Maduro’s government attempts to reassure stakeholders regarding its oil production capabilities without Chevron. Maduro publicly declared that Venezuela can maintain its oil output, stating “All of the country’s oil fields will continue to produce… even better… with our national and international partners.” This reflects an open invitation for foreign investments in the oil sector.
Jorge Rodríguez, a close ally of Maduro and president of Venezuela’s National Assembly, indicated strong global interest in investing in the Venezuelan oil industry, stating, “The telephones have not stopped ringing… from buyers and oil traders desperate to replace Chevron.” Reports suggest that the Trump administration could soon revoke licenses for other non-U.S. companies operating in Venezuela, which may further complicate the investment landscape.
These developments present risks for foreign companies such as Spain’s Repsol and Italy’s Eni, as continuing operations post-sanction could expose them to penalties for violating U.S. sanctions. The potential void left by Chevron’s exit could further destabilize Venezuela’s oil production, which plummeted from 3.2 million barrels per day before Chavez’s socialist revolution to nearly 400,000 barrels per day in 2020.
The financial contribution from foreign oil companies is a critical lifeline for Maduro’s regime, estimated at $700 million to $800 million monthly, essential for sustaining governmental operations and repression. Antonio De La Cruz of Inter American Trends noted this revenue aids in maintaining military loyalty and funding corrupt activities while allowing illicit financial laundering.
Additionally, the U.S. government currently offers a $25 million reward for information on Maduro and his Interior Minister, Diosdado Cabello, both of whom are implicated in serious drug trafficking charges.
In conclusion, as Chevron withdraws from Venezuela, President Maduro’s attempts to attract foreign oil companies may be challenged by increased U.S. sanctions. While Maduro assures continued oil production without Chevron, the effectiveness of these efforts is uncertain amidst reports of a broader U.S. crackdown on foreign oil operations in Venezuela. The future of the oil sector remains dependent on foreign investment, which is critical for the regime’s financial stability and operational capabilities.
Original Source: www.miamiherald.com
