Chevron Boosts Venezuela Oil Output While U.S. Is Eyeing New Sanctions

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https://www.bloomberg.com/news/articles/2020-02-10/chevron-boosts-venezuela-oil-while-u-s-is-eyeing-new-sanctions

Chevron Corp. has ramped up output at a key Venezuela oil project to levels not seen in almost a year, offering a thorny reminder of how U.S. sanctions are failing to deliver a knockout of Nicolas Maduro’s regime.

The U.S. is eyeing tougher sanctions that could target Russian producer Rosneft PJSC and potentially affect Chevron’s waiver at a time when tensions between the two countries are escalating anew. Maduro, meanwhile, is considering giving foreign producers operational control at some fields to bring in added cash and, perhaps, to nudge other U.S. oil companies to lobby for their own access to Venezuela’s huge oil reserves.

“The likely goal is to make it so attractive, companies start to lobby harder in the U.S.,” said Raul Gallegos, a Bogota, Colombia-based director at Control Risks, an international consulting firm.

Chevron’s waiver, which expires in April, has benefited both countries, mitigating the collapse in Venezuela’s production and hindering further expansion by Russia and China. At the same time, it allows Chevron to remain the lone U.S. producer in a country with an estimated 302.8 billion barrels of oil reserves and a dysfunctional state oil company that’s seen output fall by 74% since 2009 to about 792,000 barrels a day, according to the latest OPEC report.