Chevron terminates Venezuela contracts, will maintaining staff presence in country

Chevron has terminated the oil production, service and procurement contracts it had to operate in Venezuela, delegating its joint-venture governance to its partner, state company PDVSA, but it plans to retain its direct staff in the country, four sources close to the decisions told Reuters.

The State and Treasury departments had given companies such as Chevron, Maurel & Prom and Repsol until May 27 to receive cargoes of Venezuelan crude oil, fuel and byproducts as authorizations granted by the Biden administration revoked amid the Trump administration’s tougher stance towards Venezuela, which the U.S. government has sanctioned.

Other customers also received their last cargoes in recent days ahead of the deadline to wind down shipments from Venezuela.

Chevron has terminated the oil production, service and procurement contracts it had to operate in Venezuela. (Dado Ruvic/Reuters / Reuters)

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PDVSA in April canceled cargoes scheduled for delivery to Chevron, citing payment uncertainties related to U.S. sanctions that cut short the time to conclude those transactions.

Chevron’s license to operate in Venezuela ended on Tuesday, though sources told Reuters that Chevron has received guidance from the Trump administration that will allow it to preserve its stakes, assets and staff in Venezuela.

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Following the new guidelines, Chevron executives this week met with contractors and Venezuelan top officials, including oil minister Delcy Rodriguez, to inform them about the next steps, the sources said.

Chevron CEO Mike Wirth gives the keynote address as top energy executives and ministers meet in Houston for the annual Gastech conference in Houston, Texas, on Sept. 17, 2024. (Callaghan O’Hare/Reuters / Reuters)

Under the new authorization, Chevron cannot operate oilfields in Venezuela, export its oil or expand activities as its intention is to avoid any possible payments to President Nicolas Maduro’s administration.

The U.S. Treasury Department did not reply to a request for comment. Chevron said it remains in compliance with all applicable laws and regulations, including the sanctions framework provided for by the U.S.

“Attacks and illegal action against PDVSA have not stopped our growth,” the state company said in a statement on Wednesday, adding that output at oilfields was normal. “Our contribution to the economy’s growth does not need licenses.”

Chevron’s license to operate in Venezuela ended on Tuesday, though sources told Reuters that Chevron has received guidance from the Trump administration that will allow it to preserve its stakes, assets and staff in Venezuela. (Jonathan Raa/NurPhoto via Getty Images / Getty Images)

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Analysts are projecting that without the licenses, Venezuela’s oil output and exports will drop 15-30% by the end of 2026. That follows a slow recovery that pushed the country’s average crude output to about 1 million barrels a day this year.

Venezuela’s government, led by Nicolas Maduro, rejects the sanctions, and officials have said they amount to an “economic war.”

Reuters contributed to this report.