Venezuela to Engage with Oil Companies as Washington Eases Restrictions

Venezuela's government and opposition confirmed preparations to restart talks in Mexico with US sanctions relief on the horizon.

Caracas, May 18, 2022 ( – Venezuela will hold meetings with the US’ Chevron and European firms to discuss the potential resumption of oil operations in the country.

According to senior US officials speaking in anonymity to reporters on Tuesday, the Biden administration has authorized Chevron to negotiate its license and “the terms of potential future activities in Venezuela” with Venezuelan state oil company PDVSA.

“It’s basically just a license for Chevron to speak,” explained one of the sources, adding that the US oil giant is still banned from drilling or exporting operations in the Caribbean country. The temporary lifting of some restrictions “does not allow entry into any agreement with PDVSA or any other activity involving PDVSA or Venezuela’s oil sector.”

The Associated Press agency reported that the Biden government has also agreed to remove former PDVSA official Carlos Erick Malpica Flores from the Treasury Department’s sanctions list.

The announcements of future sanctions relief have not been confirmed by an official White House statement. Venezuelan President Nicolás Maduro and Oil Minister Tareck El Aissami have likewise yet to address the issue.

Foreign oil companies were progressively forced to abandon their joint ventures in Venezuela following Washington’s 2017 sanctions against PDVSA, 2019 oil embargo and subsequent secondary sanctions. The unilateral measures also blocked Caracas from international markets sending crude output from 1.9 million barrels per day (bpd) in 2017 to less than 500,000 bpd by the end of 2020. The country’s economic crisis was severely exacerbated and social indicators went into a steep fall.

Chevron has been the only US firm to carry out essential work to preserve its assets in Venezuela with a renewable sanctions waiver that expires in June. The California-based company has stakes in four joint ventures with PDVSA, chief among them the Petropiar crude upgrader in the Orinoco Oil Belt. Before US sanctions, the four projects produced some 200,000 bpd.

With President Biden’s arrival to power in 2021, Chevron began lobbying US diplomats to secure an oil-for-debt license that would allow the firm to retake control of joint ventures in Venezuela in order to collect PDVSA’s US $3 billion debt. The corporation has additionally offered to ship Venezuelan crude cargoes directly to the US to alleviate shortages after Washington banned Russian oil imports in March 2022.

Although Chevron has been the most enthusiastic lobbyist for sanctions relief, the oil giant is not the only corporation gearing for a possible comeback to Venezuela. An anonymous source told Bloomberg that the alleged relaxation of restrictions against Venezuela’s oil sector would include allowing European oil companies “to divert Venezuelan oil bound for China to Europe” in a move to address scarce oil supplies and skyrocketing fuel costs.

Spain’s Repsol and Italy’s Eni are the main firms in line to benefit from licenses. The two corporations were involved in several joint ventures and swap agreements with PDVSA before US threats forced them to wind down activities in 2020.

Venezuelan Vice President Delcy Rodríguez has confirmed that the Biden administration authorized US and European oil companies to “negotiate and restart operations” in the South American country. No other details were provided.

“Venezuela hopes that these decisions by the United States of America will pave the way for the total lifting of the illegal sanctions which affect our entire people,” Rodríguez wrote on Twitter on Tuesday.

Following the news of potential sanctions relief, the Venezuelan government and hardline opposition announced a “work meeting” to resume talks in México after an eight-month hiatus. On Tuesday, lead government and opposition negotiators, Jorge Rodríguez and Gerardo Blyde, posted a photo on Twitter shaking hands.

“We have insisted on the crucial importance of addressing social issues that are of primary interest to our people,” wrote Rodríguez on Twitter. For its part, the hardline opposition released a statement confirming “a series of discussions” for the reactivation of the dialogue process.

According to the US officials who briefed reporters, the steps by the Biden administration to alleviate sanctions were meant to incentivize talks following alleged requests made by US-backed opposition led by self-proclaimed “Interim President” Juan Guaidó.

The sources added that the White House would “calibrate” whether to harden or alleviate economic coercive measures on Venezuela based on “concrete outcomes” from the renewed talks.

The Norway-brokered negotiations held in Mexico City between the Maduro administration and the US-backed opposition were suspended in October 2021 following Venezuelan diplomat Alex Saab’s arrest in Cape Verde and his extradition to Florida to face money laundering charges. The Venezuelan government has blasted the case as “politically motivated.”

“Venezuela will continue to demand the participation of Alex Saab,” in the dialogue process in México, said Rodríguez on Tuesday.

The new developments regarding the Venezuela sanctions and opposition talks come on the heels of a March meeting in Caracas between President Maduro and a White House delegation to discuss oil supplies. Soon after, Venezuela released US citizens Gustavo Cárdenas and Jorge Fernández, detained for corruption and terrorism, respectively.

Additionally, pressure to ease sanctions against Venezuela has gained steam from inside Washington. On May 10, a group of 18 House Democrats, led by Raúl Grijalva (D-AR) and Jesús “Chuy” García (D-IL) penned a letter urging the Biden administration to “lift all U.S. financial and sectoral sanctions that exacerbate the humanitarian situation.”

Edited by Ricardo Vaz in Caracas.