Biden admin ready to grant Chevron Corp. license to pump oil… in Venezuela

The Biden administration is poised to authorize Chevron to produce and sell Venezuelan oil in an effort to shift illicit, shadow market sales to legitimate companies, according to sources close to the discussions.

Expansion of operations by Chevron Corp, the United State’s second-largest oil company, was the carrot offered to get socialist President Nicolas Maduro’s government and its opposition to resume political talks, according to reporting by Reuters.

The new license is allegedly contingent on an announcement from the Venezuelan government and its political opposition to implement a $3 billion humanitarian program using funds unfrozen by the U.S. and to resume talks to resolve the socialist country’s political crisis by implementing free and fair elections.

“The terms readied for approval will prevent Venezuela’s state-run oil firm PDVSA from receiving proceeds from Chevron’s oil sales,” Reuters reported. “And they will cut ‘the use of corrupt shadow firms that control the flow of Venezuela oil to countries like China…Shifting oil sales from illicit and non-transparent channels to transparent, legitimate channels.”

The license will allow Chevron to function under a sanctions framework similar to former President Donald Trump’s 2019 sanctions. If the Maduro administration fails to negotiate in good faith, the U.S. can revoke the license at any time.

In 2019, Chevron got an exemption to trade Venezuelan crude to recoup billions in debt but the exemption was suspended by Trump a year later as part of his “maximum pressure” strategy to oust Maduro, whose 2018 re-election was not recognized by the West.

Venezuela holds 300 billion barrels of oil reserves, the world’s largest, but has not hit its production targets due to underinvestment, poor maintenance, lack of supplies and U.S. sanctions, according to Reuters.

“We have long made clear our willingness to provide targeted relief based on concrete steps that alleviate the suffering of the Venezuelan people and bring them closer to a restoration of democracy,” said a spokesperson for the U.S. State Department.

The Biden administration signaled the possible lifting of restrictions on Chevron’s Venezuelan businesses after Russia and Saudi Arabia announced reductions to OPEC production in October.

While the Biden administration sought oil to replace supplies affected by the announcement, expanding the terms is not a response to energy price concerns, but rather a desire “to support the restoration of democracy in Venezuela,” a person close to the negotiations said.

To sweeten the pot, Biden released two narco-trafficking prisoners with Maduro connections in exchange for hostages taken by the regime, a move some feel could incentivize other illicit groups to take hostages in hopes of political exchanges.

“Well, the two Venezuelans that were released are the nephews of Maduro who happen to be convicted drug dealers,” Sen. Marco Rubio (R-FL) said. “They were put in jail after being convicted after a fair trial in the United States. Evidence was produced and it was overwhelming. That has now put a price tag on Americans. Every time you do one of these deals — and I wanted those people released as much as anybody. But every time you do this, now others know, I can take Americans, I can hold them until I need something as a bargaining chip.”

The desire to appease the Maduro regime could have long-running consequences, Rubio warned.

“So I think seven innocent American hostages in exchange for two convicted drug dealers who happen to be the nephews of Maduro is a huge win for Maduro and, unfortunately, puts Americans all over the world now in danger,” he said.

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