U.S. grants Chevron license to pump oil in Venezuela

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The Biden administration said on Saturday it would lift a key oil sanction against Venezuela, marking the first significant crack in a years-long US embargo that could help ease the tight global energy market.

Chevron, the only active US oil company left in Venezuela, is part of a joint venture with the country’s state oil company, but has been barred by sanctions from operating there. With a new license from the Department of Finance, he will be able to resume pumping oil. The limited license states that any oil produced can only be exported to the United States. No profit from its sale can go to the Venezuelan company, but must be used to pay Venezuelan creditors in the United States.

The move came as Nicolás Maduro’s government held its first formal talks with Venezuela’s opposition coalition in more than a year. Meeting in Mexico City on Saturday, the two sides agreed to ask the United Nations to manage several billion dollars in government funds in foreign banks that will be unfrozen to help ease a humanitarian crisis in Venezuela.

Negotiators also agreed to continue talks next month to discuss a timetable for “free” elections in 2024 and human rights issues.

“We’ve made it clear for some time that we believe the best solution in Venezuela is a negotiated one among Venezuelans,” said a senior Biden administration official who spoke on condition of anonymity under rules set by the White House. “To encourage that, we’ve also said we were willing to provide targeted sanctions relief.”

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The policy “is open to further fine tuning,” the official said. “But any further action will require additional concrete steps,” including the release of political prisoners and recognition of the legitimacy of the opposition, as well as unrestricted access to UN humanitarian missions.

The official dismissed reports that the administration was acting to ease oil shortages and high energy prices exacerbated by Russia’s invasion of Ukraine. “Allowing Chevron to start taking oil out of Venezuela is not something that will affect international oil prices. This is really about Venezuela and the Venezuelan process,” the official said, where the U.S. is “supporting a peaceful outcome and negotiated in the political, humanitarian and economic crisis”.

Venezuela has the largest oil reserves in the world, slightly more than Saudi Arabia, although its thick crude is more difficult to extract. But its output faltered due to government mismanagement even before Maduro took over in 2013 after the death of Hugo Chavez, a former military man who was elected in 1998.

US sanctions against Venezuela that began 15 years ago over drug trafficking, corruption and human rights abuses gradually expanded, culminating under the administration of Donald Trump. Trump tightened measures against the state oil company Petroleos de Venezuela, SA or PdVSA; the central bank; and individuals and companies. The activities of American oil companies there were almost completely prohibited.

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The sanctions were an attempt to block global revenue from oil sales, and production has fallen sharply as black market exports have been sold mainly to China and India. When the Venezuelan opposition declared the December 2018 election illegitimate, it recognized Juan Guaidó, the leader of the opposition in parliament, as interim president. The United States quickly followed suit and recruited dozens of other Latin American countries to do the same.

But economic and political pressure on Maduro had little effect, and the Venezuelan people bore the brunt of a failing economy and repression, leading millions to flee to neighboring countries as well as the United States, where the number of Venezuelan refugees has increased.

President Biden came to office convinced that Trump’s Venezuela policy had failed, but he did little to reverse it as powerful lawmakers vowed to block any action and the administration held out hope of winning votes in the mid-term of anti-Maduro Venezuelans and other Latin Americans per year. Florida. As recently as last summer, Biden called Guaidó to assure him of continued U.S. recognition and support, even as other governments and members of Guaidó’s own opposition coalition distanced themselves from him and they call for negotiations with Maduro.

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The Republican electoral defeat in Florida seemed to convince the administration that it was time to move. Chevron officials have said it will take time to get operations up and running in Venezuela.

The change in sanctions appears to be a nimble circumvention of a main complaint of US critics: the possibility that Maduro’s government will benefit directly. Under the terms of the license, PdVSA is kept out of any profits that its joint venture with Chevron may make.

But Maduro would be no worse off than now, and a loophole in sanctions may lead to others. For the administration, assuming negotiations with the opposition continue toward democratic elections and improved human rights, any loosening of global energy supplies is seen as a positive.

In a statement Saturday about the resumption of talks in Mexico, Sen. Robert Menéndez (DN.J.), the powerful chairman of the Senate Foreign Relations Committee and a Venezuelan hardliner, said that “if Maduro is again trying to use these negotiations to buy time to further consolidate his criminal dictatorship, the United States and our international partners must withdraw the full force of our sanctions that brought his regime to the negotiating table in the first place .

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