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Home / World / Chevron gets the green light to stay in Venezuela – for at least another three months

Chevron gets the green light to stay in Venezuela – for at least another three months



The US Treasury granted Chevron ( CVX ) a three-month extension of sanctions reversals that were due to expire at midnight. The decision gives Chevron and four US oil companies permission to continue working with the Trump-approved national oil company PDVSA.

The Ministry of Finance gave no reason to grant the extension, which expires on 25 October 2019. [19659004] A withdrawal from Venezuela would have given Chevron a financial and emotional blow that has spent almost a century sinking resources into the nation. Venezuelan President Nicolas Maduro could even have confiscated Chevron's assets by nationalizing it.

And a forced exit from Chevron would only exacerbate the historic decline of the Venezuelan oil industry, which is already grappling with a humanitarian crisis, nightmares in infrastructure, harsh US sanctions, and gross mismanagement.

"Our focus is to continue activities in Venezuela in compliance with all applicable laws and regulations," said Chevron in a statement on Friday.

Chevron said its focus is on maintaining the safety of operations and supporting more than 8,000 people who work with us and their families.

  Chevron has been in Venezuela for almost 1[ads1]00 years. It could eventually be forced

Chevron, one of the leading private oil companies in Venezuela, supports more than 8,000 people in crisis country. In Venezuela, an average of 40,000 barrels of oil and natural gas were produced in the first quarter.

The Treasury extension also applies to four US oil services companies operating in Venezuela: Halliburton ( HAL ) Schlumberger ( SLB ) [BakerHughes ( BHGE ) and Weatherford International ( WFTIF

The sanction relief contributes little to the solution of many problems, With foreign energy companies facing Venezuela, PDVSA is suffering from a prolonged liquidity shortage and has repeatedly faced problems in paying partners and suppliers. "The risks of working in Venezuela far outweigh the potential benefits," said Pavel Molchanov, raymond energy analyst James, "There is nothing the PDVSA can do to the US government, which is nearly as destructive as the Maduro regime itself." Fear of offending eg the gasoline prices at home. Despite heightened tensions between the US and Iran, oil prices came under pressure from robust production from West Texas, the heart of the US shale oil boom.

Earlier this week, Venezuelan opposition leader Juan Guaido on Twitter pledged to protect Chevron's assets in Venezuela if US officials do not renew the license. While Washington and other western capitals have recognized Guaido as the legitimate leader of Venezuela, he has little power to enforce this promise as Maduro continues to hold the responsibility.

In January, US President Donald Trump imposed sanctions on PDVSA to force Venezuelan President Nicolas Maduro out of power. These sanctions prohibited American companies from doing business with the national oil company. ExxonMobil

( XOM ) and ConocoPhillips ( COP left Venezuela's oil fields operated by the former before the following years Venezuelan President Hugo Chavez More recently, Pepsi has written off its Venezuelan business in 2015 and posted a loss of $ 1.4 billion. Mondelez ( MDLZ ) Bridgestone ( BRDCY ) Colgate [19659002] CL ) and Kimberly-Clark ( KMB ) have also ceased their operations in Venezuela.

Venezuela represents a very small part of Chevron's total production, which rose to 3 million barrels a day in the first quarter. However, leaving Venezuela would cause Chevron to lose revenue and likely force the company to write off at least part of the value of its assets there.


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