The Trump administration plans to require more firms to stop operations in Venezuela, increasing pressure on President Maduro following a directive to Chevron. Companies like Etablissements Maurel & Prom SA face a 30-day deadline to cease operations. The sanctions undermine Venezuela’s economy, heavily reliant on oil, potentially leading to significant economic decline.
The Trump administration is set to compel additional companies to cease operations in Venezuela, thereby intensifying pressure on President Nicolas Maduro. This move follows the recent directive to Chevron Corp. to halt its activities in the country. Reports suggest that firms like the French oil producer Etablissements Maurel & Prom SA and a Florida-based asphalt company managed by tycoon Harry Sargeant have been informed that they will have 30 days to conclude operations once the US revokes their operational waivers.
The cessation of these companies’ activities is projected to adversely impact Venezuela’s already struggling economy, further straining Maduro’s position amid President Trump’s insistence on democratic reforms and increased acceptance of migrants from the US. Chevron was instructed to complete its withdrawal from Venezuela by April 3, significantly shortening the customary six-month phase-out period.
Venezuela’s economic stability is heavily reliant on oil, with Chevron and other smaller firms playing essential roles as growth engines, especially as the state-owned oil company suffers from years of neglect and underinvestment. The administration is considering various strategies for dealing with Venezuela, although there is potential for reversal on allowing oil companies to continue their operations.
Foreign firms such as Spain’s Repsol SA and Italy’s Eni SpA are also awaiting clarification on whether the US will revoke their operational waivers. Reports indicate that joint ventures between Chevron and Petroleos de Venezuela SA account for a substantial portion of the Maduro government’s revenue, with estimates suggesting Chevron’s departure could result in a significant economic contraction for Venezuela.
Recent diplomatic efforts have yielded some results, including the release of six US prisoners and the resumption of deportation flights, although Maduro has attempted to minimize the consequences of Chevron’s departure, stating that it would not affect output significantly.
The Trump administration’s impending actions to compel more companies to cease operations in Venezuela could further destabilize the nation’s economy and challenge President Maduro’s regime. This includes a significant reduction in operations by major companies like Chevron, which are critical to Venezuela’s oil-dependent growth. With various foreign companies awaiting decisions on their operational statuses, the economic repercussions could be severe, potentially leading to considerable economic shrinkage this year.
Original Source: www.business-standard.com
