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Washington — While the US is allowing Chevron and four US oil companies to continue to operate in Venezuela to prevent the complete collapse of the South American nation's oil sector, recovery will take years, Elliott Abrams, the US State Department's special representative for Venezuela, said Wednesday.

The Chevron waiver was issued "to make it easier for them to help in the recovery of oil production after the regime is replaced and there's a return to democracy," Abrams told reporters. "But I think we shouldn't be under any illusions, that's going to be a multiyear project because the amount of investment by this regime has been pitiful."

The US Treasury Department last month extended a waiver allowing Chevron, Halliburton, Schlumberger, Baker Hughes and Weatherford International to continue certain work with PDVSA, Venezuela's state-owned oil company, while US sanctions are in place. The waiver was extended until January 22, but analysts expect it will likely be extended before it expires.

The US, which recognizes opposition leader Juan Guaido as Venezuela's legitimate president, has said it will not lift sanctions on Venezuela's state-owned oil company PDVSA until President Nicolas Maduro is removed from power.

"We think that the funds available to the regime are diminishing," Abrams said. "The gravy train days that they had 10 years ago are over."

Still, Abrams downplayed the impact that US sanctions have had on Venezuela's overall economy. "Severe economic decline and shortages of basic goods began long before sanctions," he said.

US Secretary of State Mike Pompeo made a similar argument in April, stressing that a decline in oil output is due to Maduro, not US policy.

"This is a problem that is seven years on," Pompeo said.

Abrams said Wednesday that Venezuela's oil sector "is in quite bad shape because of years of disinvestment and underinvestment," and pointed to more than $1.5 billion in payments to Russia's Rosneft to reduce debt, shipments of $3 billion worth of oil to China and $900 million worth oil to Cuba.

"That's about $5 billion that could have been spent on food and medicine, but was not," he said.

Venezuelan oil output averaged 650,000 b/d in October, up from 600,000 b/d in September, according to the latest S&P Global Platts survey. Venezuelan oil production has fallen by 1.24 million b/d over two years.

Earlier this year, S&P Global Platts Analytics estimated Venezuelan oil output to fall to 375,000 b/d by the end of next year, in its low-case scenario, under which President Nicolas Maduro retains power, the US imposes secondary sanctions similar to its Iran oil sanctions, and creditors accelerate their pursuit of PDVSA assets.

In October, Treasury blocked sales or transfer of Citgo shares after PDVSA missed a payment on 2020 bonds and, last week, a US appeals court upheld a decision allowing defunct Canadian miner Crystallex to auction shares in Citgo.

ConocoPhillips on Tuesday filed a motion attempting to seize PDVSA shares to collect on a $2 billion arbitration awarded for Venezuela's 2007 takeover of its assets.

-- Brian Scheid, brian.scheid@spglobal.com

-- Edited by Pankti Mehta, newsdesk@spglobal.com