Nicolas Maduro invites foreign oil companies to Venezuela amid Chevron’s withdrawal due to U.S. sanctions. Uncertainty surrounds whether these companies will respond positively to the invitation. The U.S. is increasing pressure on Venezuela’s oil sector with license revocations, impacting both U.S. and non-U.S. firms. Maduro emphasizes the continuation of oil production despite Chevron’s exit, but the financial implications for the regime are significant.
As the U.S. oil giant Chevron prepares to withdraw from Venezuela, President Nicolás Maduro extends an invitation to foreign oil companies to invest in the country. However, it remains uncertain if other companies will respond positively to his proposal alongside increasing sanctions under the Trump administration against Venezuela’s oil sector.
The Trump administration has recently revoked Chevron’s license for selling Venezuelan oil in the U.S., thereby giving the company until April 3rd to cease its operations. This license, initially granted in November 2022 by the Biden administration, allowed Chevron to operate despite extensive sanctions on the Venezuelan government.
Chevron’s output in Venezuela, which averaged around 220,000 barrels per day, accounted for nearly 24% of the nation’s total production of 900,000 barrels per day. The company has been pivotal to Maduro’s efforts to revive the struggling Venezuelan oil industry, especially given its role in compensating for production losses from the state-owned Petroleos de Venezuela.
During a recent national television address, President Maduro claimed that Venezuela would continue to produce oil without Chevron and stated his government’s openness to welcoming new foreign investors. He asserted, “All of the country’s oil fields will continue to produce, grow, and consolidate their output.”
Maduro’s comments are echoed by Jorge Rodríguez, President of the National Assembly, who reported a surge in inquiries from foreign oil companies interested in Venezuela. He suggested that these companies are eager to replace Chevron due to anticipated changes in U.S. policy regarding oil sanctions.
Recent reports indicate that the Trump administration may soon revoke licenses for other international oil companies operating in Venezuela, including Etablissements Maurel & Prom and companies associated with Florida business tycoon Harry Sargeant. Secretary of State Marco Rubio also expressed intent to terminate various oil and gas licenses awarded during the Biden administration due to their financial support for Maduro’s regime.
This shift would particularly impact non-U.S. companies such as Spain’s Repsol, Italy’s Eni, and India’s Reliance Industries, which could face potential violations of U.S. sanctions should they continue operations in Venezuela after losing their licenses.
Venezuela’s oil production has experienced a dramatic decrease, plummeting to nearly 400,000 barrels per day in 2020 from 3.2 million barrels per day before the socialist revolution led by Hugo Chávez. Foreign oil companies have played a crucial role in the country’s attempts to rejuvenate oil output.
According to Antonio De La Cruz, director of the think-tank Inter American Trends, foreign oil company contributions to Maduro’s government range between $700 million to $800 million each month. This revenue supports corruption, military upkeep, and repression as well as facilitating the laundering of funds from illegal activities.
Additionally, the U.S. government has offered a reward of $25 million for the capture of Maduro and Interior Minister Diosdado Cabello, both of whom face federal charges linked to their leadership roles in a drug-trafficking organization called Los Soles cartel.
In summary, as Chevron’s exit from Venezuela looms due to tightening U.S. sanctions, President Maduro seeks to attract foreign oil investments, although it remains uncertain whether such offers will bear fruit. The economic implications for Venezuela’s oil production are significant, given the historical contributions of foreign companies. As sanctions intensify and the government faces financial challenges, the overall stability of Venezuela’s oil sector hangs in the balance.
Original Source: www.miamiherald.com
