Venezuela: Oil Output Contracts as Foreign Partners Lobby for License Extensions

Caracas, May 19, 2025 (venezuelanalysis.com) – Venezuelan oil production took a step back ahead of a key deadline for multinational corporations to wind down their activities in the country.

The latest OPEC monthly bulletin placed the Caribbean nation’s April output at 888,000 barrels per day (bpd), as measured by secondary sources. The figure represents a 34,000 bpd drop compared to March.

For its part, state oil company PDVSA reported an output of 1.051 million bpd, virtually on a par with the prior month’s data. The direct and secondary data have had discrepancies over time due to disagreements on the inclusion of natural gas liquids and condensates.

The Venezuelan oil industry also suffered from an estimated 20 percent drop in exports last month, according to Reuters. The loss is associated with the cancellation of several cargoes assigned to US oil giant Chevron due to the company’s uncertain future in Venezuela.

Oil market instability compounded the South American country’s setback, with the price of its flagship Merey blend dropping by 4.3 percent to US $56.72 per barrel in April, as registered by OPEC.

Venezuela’s most important economic sector remains heavily targeted and constrained by US-led sanctions. In recent years, successive administrations have levied financial sanctions, an export embargo, secondary sanctions and a bevy of other measures aimed at strangling revenue.

Since returning to office, President Donald Trump has escalated coercive measures against the Venezuelan oil industry, withdrawing licenses that allowed PDVSA foreign partners to operate in the country. Chevron, alongside European companies Repsol, Eni and Maurel & Prom, were handed May 27 deadlines to wind down energy sector activities in Venezuela.

Chevron CEO Mike Wirth stated that the company remains “in dialogue” with the White House over the “modification or extension” of its existing sanctions waiver to operate in Venezuela. 

Wirth went on to argue that the corporation’s exit would pave the way for greater influence from China and other US geopolitical rivals. His position has been echoed by pro-Trump analysts.

Chevron received General License 41 (GL41), greenlighting the restart of oil drilling and export operations from Venezuela ventures, in November 2022. GL41 was the Biden administration’s only significant departure from the “maximum pressure” campaign put in place during Trump’s first term.

The Texas-based oil giant owns minority stakes in four joint projects with PDVSA that currently pump around a quarter of Venezuela’s total output.

According to Reuters, Chevron, Repsol and other multinational firms are currently seeking clarity from the US Treasury Department regarding their ability to maintain stakes in Venezuelan ventures. Several companies are eyeing licenses that were issued in the past, allowing for a minimum presence and basic maintenance activities.

Earlier this month, the US Treasury chose not to renew General License 8 (GL8) that permitted oil service companies Halliburton, Schlumberger Limited, Baker Hughes and Weatherford International to maintain oil wells and other infrastructure.

The Nicolás Maduro government has criticized the Trump administration’s ramped-up economic aggression but vowed to fulfill its agreements with foreign partners. PDVSA is set to take over oilfields currently operated by Chevron, but the inability to deliver dividends would mean accumulating debt. The present arrangement between the two companies reportedly prioritizes servicing existing debt.

Caracas has also begun rerouting crude shipments previously assigned to Chevron in the past to China. 

The Venezuelan government has reiterated calls for foreign participation in its energy sector. Venezuelan Vice President Delcy Rodríguez recently visited China, where she met with executives from the China National Petroleum Corporation (CNPC) to lobby for renewed investments.

The CNPC halted direct crude imports from Venezuela in 2019 over threats of secondary sanctions. China is the top destination for Venezuelan oil, with independent refineries known as “teapots” receiving most of the cargoes.

In March, the Trump administration threatened to impose 25 percent “secondary tariffs” on countries that import Venezuelan crude and gas. However, the measure has not been enacted, with analysts contending that it is difficult to enforce.

Edited by Cira Pascual Marquina in Caracas.