The US Department of the Treasury on Monday extended a waiver allowing Chevron and four US oil services companies to continue to operate in Venezuela outside of US sanctions.
The waiver, which was extended until January 22, was set to expire on October 25 and some analysts had speculated the Trump administration may have allowed it to expire in order to ramp up pressure on the Maduro regime, under the assumption that Chevron's departure from Venezuela could lead to further declines in oil output.
But other analysts suggested that such a production decline would be short-lived, arguing Russian or Chinese operators would quickly take over Chevron's assets in Venezuela and keep output steady.
The waiver extended Monday is a general license originally issued by the Department of the Treasury on January 28 as the administration unveiled its most punitive sanctions on Venezuela's oil sector. The waiver allowed Chevron, Halliburton, Schlumberger, Baker Hughes and Weatherford International to continue certain work with PDVSA, Venezuela's state-owned oil company, while those sanctions were in place.
Chevron, a presence in Venezuela for roughly a century, has a 30% interest in Petropiar, a joint venture with PDVSA in Venezuela's Orinoco Belt, and holds a 39.2% interest in Petroboscan, a joint venture with PDVSA in western Venezuela. These joint ventures produced about 120,000 b/d in September, according to David Voght, managing director of IPD Latin America, an energy consultancy.
Of the 25 drilling rigs currently operating in Venezuela, 20 are supplied by PDVSA and the remaining five by US companies for Chevron's joint ventures, Voght said.
Chevron stood to lose an estimated $2.5 billion if the waiver expired, forcing the company to leave Venezuela, according to a filing with the US Securities and Exchange Commission.
OUTPUT DECLINE
Venezuela's crude output shrank to 600,000 b/d in September, according to the latest S&P Global Platts OPEC survey, even less than the 650,000 b/d it pumped in January 2003, amid a PDVSA strike.
Earlier this year, S&P Global Platts Analytics forecast Venezuelan oil output would fall to 375,000 b/d by the end of next year, in its low-case scenario, under which President Nicolas Maduro retained power, the US imposed secondary sanctions similar to its Iran oil sanctions and creditors accelerated their pursuit of PDVSA assets.
Voght said he expects Venezuelan oil output may fall to 325,000 b/d by the end of the year due to PDVSA budget cuts, ongoing power outages, a lack of human resources and theft continuing to reduce output.
On Thursday, Treasury extended a sanctions waiver allowing a Finnish oil refining and marketing company to continue its joint venture with PDVSA for six months.
The waiver for Nynas, the joint venture between PDVSA's PDV Europa unit and Finland's Neste, was also set to expire on October 25.
