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Expanded license will increase Chevron’s supply to its refinery Chevron can sell Venezuelan crude to other refineries The US government also wants Exxon, Conoco and Valero to be involved in Venezuelan oil exports
(Reuters) – Oil producer Chevron is in talks with the U.S. government to expand a key license to operate in Venezuela, allowing it to export more crude to its refinery and sell it to other buyers, four sources close to the negotiations said on Wednesday.
The meeting comes as the United States and Caracas are in talks to supply up to 50 million barrels of Venezuelan oil to the United States, and as President Donald Trump presses American oil companies to invest in the South American country’s energy sector.
U.S. officials announced this week that proceeds from Venezuelan oil supplies, which are expected to help state energy company PDVSA reduce its inventory amid a severe oil blockage, will be donated to a U.S.-supervised receiver. Proceeds will be used to fund the supply of U.S. products to Venezuela.
Chevron is the only U.S. oil major operating in Venezuela, doing so with a U.S. government license that exempts the country from sanctions.
The Trump administration placed additional restrictions on Chevron’s license in July as part of tougher sanctions aimed at weakening Venezuelan President Nicolas Maduro. Those restrictions have reduced the amount of Venezuelan crude oil the company exports to the United States from 250,000 barrels per day (bpd) earlier this year to about 100,000 barrels per day (bpd) in December.
This restriction also deprived PDVSA of the revenue it earned from Chevron’s exports.
The license expansion will allow Chevron to return to its previous export levels while still offering Venezuelan crude oil to business partners who can allocate cargo to destinations outside the United States.
Some of the former business partners, including Indian refiners, were in Caracas this week inquiring about the possibility of resuming oil loading in Venezuela, two people familiar with the matter said.
The U.S. government is also seeking to involve other U.S. companies in oil exports from Venezuela, including refiner Valero Energy, which was a customer of state-owned PDVSA before sanctions, and giants Exxon Mobil and ConocoPhillips, whose Venezuelan assets were seized two decades ago, three separate industry sources said.
The possible participation of some of these companies is adding tension to the Caracas-Washington talks, three people familiar with the matter said.
Chevron, Valero, Exxon and Conoco did not immediately respond to requests for comment.
“While we do not comment on specific licenses or license requests, the U.S. Department of the Treasury is committed to supporting President Trump’s efforts on behalf of the Venezuelan people,” a department spokesperson said.
PDVSA announced on Wednesday that it is in advanced negotiations with the United States to export oil to the country on similar terms to its partner Chevron.
“This process (…) is based on a strictly commercial transaction based on legal, transparent and mutually beneficial terms,” it said in a statement, without providing further details.
Separately, a PDVSA director said the company plans to sell the crude at market prices.
On Wednesday, the United States, which boarded and seized two Venezuelan-linked tankers in the Atlantic Ocean, announced that its oil embargo against the country remains in place and that cargo on board the vessels it has sanctioned is being targeted.
Report by Marianna Paraga. Additional reporting by Sheila Dang, Daphne Psaledakis and Reuters staff. Editing: Simon Webb and Anna Driver
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