US extends Chevron waiver for Venezuela: Update

Market: Crude oil
01/06/21

Adds comments from Chevron

The US government today renewed Venezuela sanctions waivers allowing Chevron and four oil services companies to maintain a minimal presence in that country, signaling no changes in the broader policy toward Caracas.

The waivers allowed Chevron and services companies Schlumberger, Halliburton, Baker Hughes and Weatherford to continue operating in Venezuela after former president Donald Trump's administration imposed oil sanctions on the Opec country in January 2019. The terms of the US companies' continued presence were tightened last year, preventing Chevron from drilling, lifting, purchasing or processing Venezuelan-origin crude or oil products. The current waiver, valid through 1 December, maintains the same terms.

Chevron said it "will continue to comply with applicable laws and regulations in relation to the activities that it is authorized to undertake in Venezuela."

State-owned PdV is the majority shareholder in Chevron's oil assets, of which only PetroPiar and PetroBoscan in western Venezuela were active when the US company was forced to halt activities last year. Chevron has 30pc of PetroPiar and 39pc of PetroBoscan. The company also has 34pc of the PetroIndependencia joint venture in the oil belt, and 25pc of PetroIndependiente in the west. And on the maritime border with Trinidad and Tobago, Chevron has 60pc of the Loran natural gas field.

"We remain committed to the safety and well-being of our employees and their families, the integrity of our joint venture assets, and the company's social and humanitarian programs during these challenging times," Chevron said. "Chevron is a constructive presence in the country, supporting social investment and humanitarian programs that provide needed services for the communities where we work, including nutrition and health. In the last 10 years, we have dedicated more than $100mn dollars toward diverse social initiatives."

President Joe Biden's administration has indicated it has no immediate plans to ease sanctions against Venezuela's oil sector or change its policy of forcing the country's president, Nicolas Maduro, to agree to a new election. US sanctions have been unsuccessful in achieving that outcome — a reality current US officials acknowledge — but Biden's administration is still reviewing possible tweaks to its Venezuela policy, and the issue is not a foreign policy priority for the White House.

The Citgo docket

The Biden administration will have another chance to address its Venezuela policy next month, as it reviews whether to extend a prohibition on a potential takeover of US refiner Citgo by holders of PdV's bond.

The holders of a defaulted PdV 2020 bond backed by shares in Citgo have been unable to press for a takeover after the US Treasury Department's sanctions enforcement arm, the Office of Foreign Assets Control (OFAC), began issuing general licenses in 2019 that prohibit that outcome.

Aside from the PdV 2020 bondholders, other creditors of PdV and the Venezuelan government have asked US courts to satisfy their claims by putting Citgo on the block. A process to establish the sale of shares of Citgo is underway in US District Court for the District of Delaware. "While the court may soon be required to resolve additional issues regarding the OFAC regulations, the court need not do so at this time in order to finalize the special master's appointment," judge Leonard Stark wrote in an opinion last week, referencing the appointment of a representative overseeing the sale.

The court battles for Citgo highlight political and legal challenges that originated with an unprecedented US policy decision to discontinue its recognition of Maduro's government and awarding that recognition to Venezuelan opposition leader Juan Guaido.

Citgo, as a result, is still nominally controlled by an ad hoc board that reports to Guaido, even though PdV remains under the control of Maduro's government. Citgo operates a 770,000 b/d refining system in the US Gulf coast and midcontinent.

By Haik Gugarats

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20/12/24

US House votes to avert government shutdown

Washington, 20 December (Argus) — The US House of Representatives voted overwhelmingly today to extend funding for US federal government agencies and avoid a partial government shutdown. The Republican-controlled House, by a 366-34 vote, approved a measure that would maintain funding for the government at current levels until 14 March, deliver $10bn in agricultural aid and provide $100bn in disaster relief. Its passage was in doubt until voting began in the House at 5pm ET, following a chaotic intervention two days earlier by president-elect Donald Trump and his allies, including Tesla chief executive Elon Musk. The Democratic-led Senate is expected to approve the measure, and President Joe Biden has promised to sign it. Trump and Musk on 18 December derailed a spending deal House speaker Mike Johnson (R-Louisiana) had negotiated with Democratic lawmakers in the House and the Senate. Trump lobbied for a more streamlined version that would have suspended the ceiling on federal debt until 30 January 2027. But that version of the bill failed in the House on Thursday, because of opposition from 38 Republicans who bucked the preference of their party leader. Trump and Musk opposed the bipartisan spending package, contending that it would fund Democratic priorities, such as rebuilding the collapsed Francis Scott Key Bridge in Baltimore, Maryland. But doing away with that bill killed many other initiatives that his party members have advanced, including a provision authorizing year-round 15pc ethanol gasoline (E15) sales. Depending on the timing of the Senate action and the presidential signature, funding for US government agencies could lapse briefly beginning on Saturday. Key US agencies tasked with energy sector regulatory oversight and permitting activities have indicated that a brief shutdown would not significantly interfere with their operations. But the episode previews potential legislative disarray when Republicans take full control of Congress on 3 January and Trump returns to the White House on 20 January. Extending government funding beyond 14 March is likely to feature as an element in the Republicans' attempts to extend corporate tax cuts set to expire at the end of 2025, which is a key priority for Trump. The Republicans will have a 53-47 majority in the Senate next month, but their hold on the House will be even narrower than this year, at 219-215 initially. Trump has picked two House Republican members to serve in his administration, so the House Republican majority could briefly drop to 217-215 just as funding for the government would expire in mid-March. Congress will separately have to tackle the issue of raising the debt limit. Conservative advocacy group Economic Policy Innovation Center projects that US borrowing could reach that limit as early as June. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US government agencies set to shut down

20/12/24

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20/12/24

US government agencies set to shut down

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Viewpoint: More changes for Dated crude benchmark ahead

20/12/24

News

20/12/24

Viewpoint: More changes for Dated crude benchmark ahead

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Trump backs new deal to avoid shutdown: Update

19/12/24

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19/12/24

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US Congress passes waterways bill

19/12/24

News

19/12/24

US Congress passes waterways bill

Houston, 19 December (Argus) — The US Senate has passed a bipartisan waterways infrastructure bill, providing a framework for further investment in the country's waterways system. The waterways bill, also known as the Water Resources and Development Act (WRDA), was approved by the Senate in a 97-1 vote on 18 December after clearing the US House of Representatives on 10 December. The WRDA's next stop is the desk of President Joe Biden, who is expected to sign the bill. The WRDA has been passed every two years, authorizing the US Army Corps of Engineers (Corps) to undertake waterways infrastructure and navigation projects. Funding for individual projects must still be approved by Congress. Several agriculture-based groups voiced their support for the bill, saying it will improve transit for agricultural products on US waterways. The bill also shifts the funding of waterways projects to 75pc from the federal government and 25pc from the Inland Waterways Trust Fund instead of the previous 65-35pc split. "Increasing the general fund portion of the cost-share structure will promote much needed investment for inland navigation projects, as well as provide confidence to the industry that much needed maintenance and modernization of our inland waterway system will happen," Fertilizer Institute president Corey Rosenbusch said. The bill includes a provision to assist with the damaged Wilson Lock along the Tennessee River in Alabama. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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