Biden Admin Lets Chevron Restart Oil Production in Venezuela

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According to the Associated Press, the Joe Biden administration is moving to relax oil sanctions against Venezuela.

This is part of U.S. support to the long-stalled talks between the Maduro dictatorial regime and opposition leaders as both sides attempt to right a nation that has been in chaos.

WASHINGTON (AP), — Saturday’s oil sanctions were eased by the Biden administration in support of newly resumed negotiations between President Nicolas Maduro and his opposition.

After years of sanctions that severely restricted oil and gas profits flowing to Maduro’s government, the Treasury Department has allowed Chevron to resume “limited energy production in Venezuela.” The Treasury Department granted Chevron, a California-based company, and other U.S. firms permission to maintain basic wells that it shares with PDVSA, the state-run oil giant.

The new policy would see profits from energy sales going to Chevron to pay down its debt, not to PDVSA.

After a more than one-year-long pause, talks between the Maduro government’s “Unitary Platform,” and Mexico City resumed on Saturday. It was unclear if they would follow a different path than previous rounds of negotiations, which have not helped to end the country’s political impasse.

The Washington Times has more information about the negotiations:

After the Venezuelan government announced Saturday that it would implement a humanitarian program worth $3 billion using funds not frozen by the U.S., the authorization was granted.

Both sides agreed to resume negotiations next month in Mexico City in order to create a framework for political change, including the possibility of holding presidential elections in 2024.

This new policy seems to be able to ease the pressure at the pump and lower the potential, soaring winter heating oil prices for consumers. But both a Chevron CEO and a Biden administration official said that it is unlikely.

The Washington Times:

A senior administration official denied that the move was intended to lower rising energy costs as the U.S. enters winter. The official claimed that the U.S. was offering sanctions relief to Venezuela because the Venezuelan government was taking concrete steps to alleviate suffering and support the restoration of democracy.

The official stated that the Chevron expanded license was not going to affect international oil prices. It is about Venezuela, and a policy to support a peaceful, negotiated result to a political and humanitarian outcome in Venezuela today.

However, Mike Wirth, Chevron’s Chief Executive, warned that it would take months, if not years to restore Venezuela’s oil fields and allow production to resume.

He stated that it wouldn’t have an immediate effect when Venezuela resumes oil production.

We’ll be keeping an eye on this, even though it isn’t likely to affect prices anytime soon.