Venezuelan energy officials and Chevron executives plan to address workers in their joint ventures this week as they prepare for the first major foreign participation in Venezuela’s oil industry in years, four sources close to the matter said.
In November, the U.S. Treasury Department granted Chevron a six-month expanded license, part of Washington's effort to encourage political talks between President Nicolas Maduro and the opposition toward an election next year.
The California-based company has said it does not expect significant capital investment in the coming six months in Venezuela due to restrictions in the license, which allows exports to the United States but prevents proceeds from reaching Venezuela's coffers.
The meeting with workers, which will take place at the joint oil project Petropiar in the Orinoco Belt, will communicate new managers and explain maintenance work and operational improvements to be done to facilities in the near term, the people said.
Venezuela's Socialist President Nicolas Maduro, speaking at PDVSA headquarters on Dec. 6, said the Chevron contracts adhere to energy provisions in the country's constitution, and the U.S. firm "will soon be producing and the oil reaching markets worldwide."
Pushing back at critics of the agreement, Maduro added that trading relationships "cannot be ideologized. Energy relationships cannot be ideologized."
PDVSA, which owns the majority of four joint ventures with Chevron, is expected to retain the existing projects' presidents, while Chevron would appoint general managers to some, the sources said. The projects' ownership will remain untouched.
PDVSA and Venezuela's oil ministry did not immediately reply to a request for comment.
Chevron said in a statement it "continues to conduct business in compliance with the sanctions framework provided by the U.S. Office of Foreign Assets Control [OFAC]."
The joint venture employees, which are paid by PDVSA according to Venezuelan laws, will continue working under the same terms.
The parties are in talks to expand some benefits and encourage better performance at facilities, especially in a key crude upgrader in the Orinoco, which will supply heavy crude to the United States once PDVSA allocates cargoes, one of the sources added.
Venezuela's Hydrocarbon Law mandates joint operation of all oil joint ventures in Venezuela. Even though Chevron hopes to expand its say in the joint ventures, both the U.S. license and Venezuela's legal framework limit what Chevron can do.
Recommended Reading
Exxon’s Guyana Gas Project a “Win-Win,” Set for Hook-up by Year-end ‘24
2024-04-26 - Exxon Mobil Corp. CEO Darren Woods said the company’s gas-to-power project in Guyana as a “win-win proposition particularly for the people of Guyana” when completed and hooked-up by year-end 2024.
Texas LNG Export Plant Signs Additional Offtake Deal With EQT
2024-04-23 - Glenfarne Group LLC's proposed Texas LNG export plant in Brownsville has signed an additional tolling agreement with EQT Corp. to provide natural gas liquefaction services of an additional 1.5 mtpa over 20 years.
US Refiners to Face Tighter Heavy Spreads this Summer TPH
2024-04-22 - Tudor, Pickering, Holt and Co. (TPH) expects fairly tight heavy crude discounts in the U.S. this summer and beyond owing to lower imports of Canadian, Mexican and Venezuelan crudes.
What's Affecting Oil Prices This Week? (April 22, 2024)
2024-04-22 - Stratas Advisors predict that despite geopolitical tensions, the oil supply will not be disrupted, even with the U.S. House of Representatives inserting sanctions on Iran’s oil exports.
Exxon’s Payara Hits 220,000 bbl/d Ceiling in Just Three Months
2024-02-05 - ExxonMobil Corp.’s third development offshore Guyana in the Stabroek Block — the Payara project— reached its nameplate production capacity of 220,000 bbl/d in January 2024, less than three months after commencing production and ahead of schedule.