Chevron terminates Venezuela contracts, will maintaining staff presence in country

Chevron has completed oil production contracts, services and purchases that were forced to work in Venezuela, and to impose the governance of joint participation to its partner, the government company PDVSA, but it plans to keep its direct employees in the country, and four sources close to Reuters decisions.

State and Treasury departments gave companies such as Chevron, Morel, the Prom and Repsol program until May 27 to receive shipments of Venezuelan crude oil, fuel and secondary products, as licenses granted by the Biden administration that were nullified amid the position of the Trump administration towards Vinzuela, which the US government has a punishment.

Other clients also received their last shipments in recent days before the deadline for calming shipments from Venezuela.

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In April, PDVSA canceled shipments that are scheduled to be delivered to Chevron, noting the uncertainty in paying US sanctions that reduce time to conclude these transactions.

Chevron’s license to work in Venezuela ended on Tuesday, although sources told Reuters that Chevron had received instructions from the Trump administration, which will allow it to maintain its shares, assets and employees in Venezuela.

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After the new guidelines, Chevron’s executive directors met this week with contractors and senior Veerague officials, including Oil Minister Delsey Rodriguez, to inform them of the following steps.

Mike Worth, CEO of Chevron, presents the main address, where senior executives and ministers at Houston meet at the annual GASTECH conference in Houston, Texas, on September 17, 2024. (Calhan Ohair / Reuters / Reuters)

Under the new mandate, Chevron cannot operate oil fields in Venezuela, export their activities or expand their activities because they are to avoid any possible payments to the management of President Nicholas Maduro.

The US Treasury did not respond to a request for comment. Chevron said it remains compatible with all applicable laws and regulations, including the framework of the sanctions stipulated by the United States

“The attacks and illegal measures against PDVSA have not stopped growing,” the government company said in a statement on Wednesday, adding that production in oil fields was normal. “Our contribution to the growth of the economy does not need licenses.”

Chevron’s license to work in Venezuela ended on Tuesday, although sources told Reuters that Chevron had received instructions from the Trump administration, which will allow it to maintain its shares, assets and employees in Venezuela. (Jonathan Raa / Nurphoto via Getty Images / Getty Images)

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Analysts expect that without licenses, oil production in Venezuela will decrease and export 15-30 % by the end of 2026. This follows a slow recovery that pushes the country’s average production to about one million barrels per day.

The government of Venezuela, led by Nicholas Maduro, rejects sanctions, and officials said it is up to an “economic war.”

Reuters contributed to this report.