U.S. oil producer Chevron expects its exports of Venezuelan crude to the U.S. to resume this month, the company’s chief executive said on Friday, following a restricted license received this week from the U.S. Treasury Department to operate in the sanctioned country and do oil swaps.
Chevron’s CEO Mike Wirth also said in a call to disclose the company’s quarterly results that the exports will begin with a “limited amount,” and added that he does not expect the flows to have a material impact on third-quarter results.
Chevron’s exports of Venezuelan oil remain suspended since April, when state-owned oil firm PDVSA canceled cargoes it had scheduled for its joint-venture partner over payment problems related to U.S. sanctions on the OPEC country.
In March, U.S. President Donald Trump’s administration revoked a license granted to Chevron under former President Joe Biden. Trump’s administration gave Chevron and a handful of PDVSA partners until late May to wind down transactions.
Last month, Washington reinstated the licenses after a successful prisoner swap with Venezuela. Members of the U.S. Congress also urged reinstating the licenses to prevent Venezuelan barrels from going to China.
Before the licenses were canceled, Chevron exported some 250,000 barrels per day (bpd) of Venezuelan crude in the first quarter, according to data based on vessel movements. That represented 29% of the country’s total exports.
The new authorization is similar to the Biden-era license, but it prohibits payments to Venezuelan President Nicolas Maduro’s administration in any currency, according to sources and information provided by U.S. officials.
Since the license was greenlit by Washington, Chevron has been negotiating a new off-taking mechanism with cash-strapped PDVSA.
The arrangement is expected to include payments of mandatory royalties and taxes to Venezuela in kind, which could come from a portion of crude jointly produced or through oil swaps with Chevron supplying Venezuela with diluents, the sources said.
(Reporting by Sheila Dang, writing by Marianna Parraga and David Gregorio)