Biden Administration Allows Chevron to Resume Oil Drilling in Venezuela

The Biden administration on Saturday approved a Chevron joint venture to resume oil drilling in Venezuela.

“The Treasury Department’s Office of Foreign Assets Control (OFAC) has issued a Venezuelan General License (GL) 41, authorizing Chevron Corporation to resume limited natural resource mining operations in Venezuela,” the Treasury Department said in a statement. said in

The purpose of the approval is to “relieve the suffering of the Venezuelan people and help restore democracy,” the statement said.

The Biden administration’s decision came after the Nicolas Maduro administration and the opposition political alliance Unitary Platform resumed talks in Mexico City.

This was the first negotiation between the parties since October 2021.

Both sides also announced progress including humanitarian agreements focused on education, health, food security, flood response and power programs to benefit the Venezuelan people, as well as commitments to continue consultations on Venezuela’s 2024 elections. .

The announcement by both parties is an important step in restoring democracy in Venezuela, the Biden administration said.

petrol station venezuela
A view of the gas station of Venezuelan state oil company PDVSA in Caracas, Venezuela on August 20, 2018. (Marco Bello/Reuters)

The newly issued license will allow Chevron to resume operations in the socialist country through a joint venture with Venezuela’s state-owned PDVSA. Oil produced by the joint venture can be sold to the United States if it is sold to Chevron first.

Proceeds from the sale of energy will not provide income to PDVSA, but will go towards repaying debt owed to Chevron.

The Ministry of Finance argued that PDVSA would not benefit from the project.

The Epoch Times reached out to Chevron for comment.

Republicans: Why Venezuela?

President Joe Biden’s move confirmed various media reports about the new authorization, which was criticized by Republicans.

“Why is Joe Biden obsessed with killing American oil and gas jobs and building them in Venezuela?” Rep. Thomas Tiffany (R-Wisconsin) reports on General Licensing answered.

Tiffany is a member of the House Natural Resources Committee.

With U.S. shale production growth slowing, Russian oil exports shrinking under sanctions, and Saudi Arabia hinting at possible OPEC production cuts, Biden has reason to give Chevron a broad license to operate.

Energy prices skyrocketed after Biden took office. He tried to calm the market before the Nov. 8 midterm elections by releasing more than 200 million barrels of the country’s emergency oil reserves and reducing the strategic oil reserves to 1984 levels.

However, these releases will end soon.

Chevron Operations in Venezuela

Venezuela has the world’s largest oil reserves of around 300 billion barrels, but underinvestment, inadequate maintenance, supply shortages, and US sanctions keep it from meeting its production targets.

The Biden administration has suggested that any easing of Venezuelan sanctions, including granting Chevron a broad license to restore oil production and regain trade privileges in Venezuela, will only come if both sides make progress in political talks. was

Epoch Times photo
In this undated file photo, an oil tanker is seen at the José refinery cargo terminal in Venezuela. (Jorge Silva/Reuters)

Chevron is a PDVSA partner in several petroleum joint ventures that pump and process crude oil for export. The joint venture he was producing about 200,000 barrels a day until U.S. sanctions and funding shortages cut production.

After oil sanctions against Venezuela in 2019, Chevron received exemptions to trade Venezuelan crude oil to recover billions of dollars in pending debt. Those privileges were suspended by President Donald Trump a year later as part of his “maximum pressure” strategy to oust Maduro, whose re-election in 2018 was not recognized by the West.

The U.S. has begun to consider requests to expand Chevron’s operations more urgently this year as Washington seeks oil to replace sources hit by sanctions against Russia, along with OPEC’s decision to cut production. .

Reuters contributed to this report.

Allen Chong


Allen Zhong is a longtime writer and reporter for The Epoch Times. In 2012 he joined Epoch Media Group. His main focus is US politics. Send us story ideas: [email protected]