License expires six months after Feb. 1 renewal. No mention of other company-specific licenses. Venezuelan crude production rises. Trump delivers on promises.
Kate Wiston, Platss S&P Global
WASHINGTON
EnergiesNet.com 02 27 2025
US President Donald Trump is reversing a2022 license that has allowed Chevron to operate in Venezuela’s oil sector, according to a Feb. 26 post on Truth Social, his social media platform.
“We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolas Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022, and also have to do with electoral conditions within Venezuela, which have not been met by the Maduro regime,” Trump said in the post.
“Additionally, the regime has not been transporting the violent criminals that they sent into our country (the good ole’ U.S.A) back to Venezuela at the rapid pace that they had agreed to,” Trump said. “I am therefore ordering that the ineffective and unmet Biden ‘concession agreement’ be terminated as of the March 1st operation option to renew.”
While Trump did not mention Chevron by name, his post appears to refer to the Treasury Department’s General License 41, authorized on Nov. 26, 2022, which authorized Chevron to resume limited natural resource extraction operations in Venezuela.
GL 41 is valid for six months from the last date of renewal, which was Feb. 1, 2025.
The Biden administration issued GL 41 after Maduro and the Venezuelan political opposition agreed to resume talks to work toward a free and fair election. The opposition candidate won the July 2024 election, but Maduro has continued to cling to power.
“We are aware of today’s announcement and are considering its implications,” Chevron spokesperson Bill Turenne said. “Chevron conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by the US government.”
Chevron is the only US company on the ground in Venezuela and sanctions have been a long-running issue there, CEO Mike Wirth said during the company’s fourth-quarter earnings call on Jan. 31.
Trump did not mention the fate of the remaining Treasury Department licenses that allow other companies, such as Spain’s Repsol, Italy’s Eni and France’s Maurel & Prom, to operate in Venezuela.
More about US domestic politics?
It is possible that Trump is making a threat and could decide on specific licenses later.
“As we know Trump regularly announces things and may negotiate after that,” said Rachel Ziemba, a senior advisor at Horizon Engage. “In this case, the mention of Venezuela’s non-facilitation of repatriation looks to be the trigger with concerns about democracy secondary. This suggests it’s still possible for a reprieve as we have seen with various Trump tariff considerations. Trump could use this cancellation threat as an opportunity to decide which licenses to cancel, perhaps prioritizing some that he thinks benefit the US.”
If Trump pulls all licenses, including “those that allow other companies to trade, there would likely be a reduction in oil produced in Venezuela, tightening global markets,” Ziemba said.
“Even if the threat is abated or put off it would reinforce my view that production increases in Venezuela would be gradual and that new investors will be very wary given the difficult operating conditions, risks of sanctions snapback and other risks including a lack of reliable utilities,” she said.
While it is possible that Trump’s announcement is part of a continuing negotiation, it may have more to do with domestic politics than foreign affairs, said David Goldwyn, president of Goldwyn Global Strategies and chair of the Atlantic Council Global Energy Center’s Energy Advisory Group.
“In any case restricting US investment in Venezuela is a proven recipe for increasing the flow of the illegal migration, subsidizing the Chinese economy, expanding Iranian influence in our hemisphere, all with no discernible impact on Venezuela’s internal politics,” Goldwyn said.
Venezuelan output likely to drop
Venezuelan average crude production by state PDVSA and its foreign partners rose to 965,000 b/d in 2024, with Chevron’s output averaging 203,000 b/d, according to estimated data included in a PDVSA production report reviewed by Platts. Between January and December, Chevron added 68,000 b/d to Venezuelan crude production.
In 2021, the last full year before the Chevron license, PDVSA and its foreign joint venture partners recorded average crude oil production of 560,000 b/d.
Venezuela’s crude exports have averaged 766,000 b/d so far in February, with the US the single largest buyer at 175,000 b/d, according to S&P Global Commodities at Sea.
If Trump pulls the licenses, Ziemba said, Venezuela would boost crude exports to China “through illicit channels and the country would be reliant on diluent imports from Iran or others to dilute their heavy oil.”
Venezuela has exported 73,000 b/d of crude to China so far in February, down from 254,000 b/d in November, CAS data shows.
Trump’s envoy for special missions, Richard Grenell, met with disputed Maduro on Jan. 31 to discuss repatriation flights from the US and the release of US detainees, although it was unclear whether US oil licenses and sanctions were on the table during the talks.
The legitimacy of Maduro, sworn in for a new six-year term on Jan. 10, is in question after he proclaimed himself the winner of the July 28, 2024, presidential elections without presenting electoral records.
Edmundo Gonzalez Urrutia, who won the elections with 70% of the votes according to evidence presented by the opposition, received asylum from Spain. Maria Corina Machado, the leader of the Venezuelan opposition, is in hiding in Venezuela, and many leaders of her party, Vente Venezuela, are imprisoned or refugees in the Spanish embassy in Caracas.
spglobal.com 02 36 2025
