The state oil firm PDVSA of Venezuela will take over Chevron’s operations following the termination of Chevron’s U.S. operating license. Following recent sanctions, PDVSA plans to continue producing heavy crude while aiming to maintain production levels and redirect exports to non-U.S. markets.
The state oil company of Venezuela, PDVSA, will take charge of crude production from its joint ventures with Chevron, following the termination of Chevron’s license to operate in Venezuela by the Trump Administration. As reported by Reuters, this decision follows President Trump’s assertion regarding the necessity for electoral reform in Venezuela and his disapproval of the current government’s approach to migration.
On Truth Social, President Trump addressed the cancellation of concessions made by the Biden administration, explicitly referencing the agreement on oil transactions from November 2022. According to the U.S. Treasury’s directive, Chevron was given until April 3 to cease its operational and export activities from Venezuela, which previously included exporting around 200,000 barrels per day of heavy crude to the U.S. under the sanctions waiver.
Following the revocation of the waiver, PDVSA is establishing its operational strategies moving forward. The Venezuelan firm has outlined three potential scenarios for production post-April 3, intending to maintain a production rate between 105,000 and 138,000 barrels per day of Hamaca heavy crude at the Petropiar site. This production is projected to align with previous output levels, according to internal documents accessed by Reuters.
A portion of the Hamaca crude will be utilized for domestic refining, with PDVSA planning to sell the remaining volume to alternative markets beyond the United States. The firm is also focused on enhancing the supply of diluents essential for upgrading heavy crude, which is necessary for pipeline transportation. PDVSA’s primary objective remains to sustain production levels at Petropiar in order to avert interruptions at the heavy crude upgrader or any oilfield shutdowns.
In summary, the PDVSA’s takeover of Chevron’s operations in Venezuela will mark a significant shift in the country’s oil production dynamics. This change comes in response to geopolitical actions from the U.S. Administration, emphasizing the impact of international policies on local industries. PDVSA’s strategy to maintain production levels while reallocating resources showcases its efforts to stabilize the Venezuelan oil sector amidst ongoing challenges.
Original Source: oilprice.com
