Chevron Corp could soon get U.S. approval to expand operations in Venezuela and resume trading its oil once the Venezuelan government and its opposition resume political talks, Reuters reported, citing sources.
U.S. permission to help Chevron restore the country's declining oil production has been one of the biggest selling points for the start of talks between Venezuela's government and the opposition.
U.S. officials this year tried to smooth the return to negotiations between socialist President Nicolas Maduro and the country's opposition by offering a small easing of sanctions and the release of some Venezuelans from U.S. prisons.
People said both Venezuelan parties and U.S. officials are pushing for talks in Mexico City this weekend, the first since October 2021.
Chevron declined to comment on the expected approval or conditions. The oil company remains in compliance with the terms of its current license, a spokesman said. The maintenance license expires Dec. 1.
The conditions pending approval would prevent Venezuelan state oil company PDVSA from generating revenue from Chevron's oil sales. And they will stop the use of corrupt shady firms that control the flow of Venezuelan oil to countries such as China, the source said.
White House officials seek to"shift oil sales from illegal and opaque channels to transparent, legal channels. He said the United States could revoke the permits if the Maduro administration fails to negotiate in good faith or fulfill its obligations.
U.S. President Joe Biden's administration has reasons to grant Chevron a broader license to operate as U.S. shale production growth slows, oil exports from Russia decline because of sanctions, and Saudi Arabia signals a possible OPEC production cut.
The United States has kept oil prices from skyrocketing this year by issuing more than 200 million barrels of national emergency oil reserves. But those releases are about to expire.
The Biden administration has made it clear that any easing of sanctions against Venezuela, including granting Chevron a broad license to resume oil production and restoring trade privileges in Venezuela, will only happen if both sides advance in political negotiations.
Chevron partners with PDVSA in several oil joint ventures that pump and refine crude oil for export. Together, the ventures were producing about 200,000 barrels per day (bpd) before U.S. sanctions and a lack of financing led to a reduction in their production.