WHAT YOU NEED TO KNOW:
- The Biden administration gave Chevron an expanded license to resume production in Venezuela.
- The move allows Chevron to revive existing oil projects in Venezuela and bring crude to refiners in the U.S.
- However, the agreement restricts cash payments to Venezuela, which could lead to the reduction of oil available to Chevron.
The Treasury Department on Saturday said it would allow Chevron to resume pumping oil from Venezuela oil fields.
The license, granted by the Treasury Department, would allow the California-based oil company to pump Venezuelan oil for the first time in years in joint ventures with Venezuela’s national oil company Petróleos de Venezuela (PdVSA.)
It also signals an opening for other oil companies to resume their business in the South American country, two years after the Trump administration cracked down on companies’ activities there in an effort to put pressure and oust the Maduro government, the Wall Street Journal reports.
Venezuelan President Nicolás Maduro and the Unitary Platform, an opposition coalition, reached an agreement to implement a humanitarian program and continue negotiations to hold free and fair elections within the country.
The license prohibits PdVSA from receiving profits from Chevron’s oil sales and the U.S. and it does not authorize other activity with PdVSA, the U.S. Treasury said in a statement.
Other Venezuela-related sanctions and restrictions imposed by the United States remain in place.
“The announcements by the Unitary Platform and the Maduro regime are important steps in the right direction to restore democracy in the country,” the Treasury Department said.
“The United States welcomes and supports the reopening of negotiations between the Unitary Platform and the Maduro regime, as part of our longstanding policy to support the peaceful restoration of democracy, free and fair elections, and respect for the rights and freedoms of Venezuelans.”
“This action is not being taken in response to energy prices, this is a limited license. As we have said in the past, this is about the regime taking the steps needed to support the restoration of democracy in Venezuela,” a Biden administration official said in a separate statement to Axios.
The move, while tied to political developments in Venezuela, could keep gas prices lower by adding more oil to the global market.
U.S. officials had previously offered to ease some sanctions on Venezuela to encourage peaceful negotiations between the opposition and the Maduro regime.
Biden officials in March made a rare trip to Venezuela to meet with the Maduro regime to discuss the release of U.S. detainees and urge them to continue negotiations, which have been suspended for months.