Washington — President Donald Trump's executive order prohibiting nearly all crude, diluent and all other commercial trade with Venezuela will not immediately impact a waiver granted to Chevron and other US oil services companies allowing them to continue working with PDVSA.
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But analysts believe the executive order, signed by Trump late Monday, clearly signals that Chevron's waiver will not be renewed when it expires October 25.
"There's nothing in [the order] that I would interpret as preventing Chevron from conducting ordinary business operations in Venezuela under the terms of the general license," said Neil Bhatiya, an associate fellow with the Center for a New American Security. "The administration could always decline to renew the general license when the deadline expires obviously, in which case Chevron would be exposed to penalties."
In a speech in Lima, Peru on Tuesday, US National Security Advisor John Bolton outlined the administration's efforts to ramp up sanctions pressure on the Maduro regime and the intent of the executive order to discourage China, Russia, and Cuba from continuing their support of the regime.
The order freezes all of the Maduro regime's assets, prohibiting transactions with the government of Venezuela, unless those transactions are specifically exempted, Bolton said.
This would likely allow Chevron, Halliburton, Schlumberger, Baker Hughes and Weatherford International to continue certain work with PDVSA under a waiver the Trump administration extended late last month for 90 days.
Ray Fohr, a Chevron spokesman, said Tuesday that the company was still reviewing the executive order.
The waiver, or general license, was initially issued to Chevron and the four other US companies in January when the US unveiled sanctions on PDVSA, effectively creating a de facto ban on US imports of Venezuelan crude and prohibiting exports of diluent to the South American country.
Maduro had threatened to nationalize Chevron and other US assets if the waiver was lifted, likely transferring them to Russian and Chinese companies.
Trump administration officials had seriously debated allowing the waiver to expire July 27 as part of a "maximum pressure" campaign on Maduro, but agreed to a 90-day extension since it "buys a little more time and puts Chevron on notice to potentially be ready to leave after October," said Joe McMonigle, an analyst with Hedgeye Risk Management.
"We think it's highly doubtful there will be another extension granted in the fall," McMonigle said.
Chevron, a presence in Venezuela for nearly a century, currently works with PDVSA on four joint-venture operations in western and eastern Venezuela, including three heavy or extra-heavy crude oil projects, according to the company's website. Chevron's biggest project is Petropiar in the Orinoco Belt, which had an average net production of 26,000 b/d of liquids in 2018, according to the company.
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