Venezuelan opposition leader, Juan Guaido, on Tuesday said he would seek to protect Chevron Corporation assets if the U.S. does not renew a license allowing the company to operate in the country.
Guaido said in spite of sanctions on the OPEC nation’s oil sector (Venezuela) by U.S., he would protect the company.
The Trump administration slapped sanctions on state oil company PDVSA [PDVSA.UL] in January as part of a bid to cut off cash flow to socialist President Nicolas Maduro and pressure him to leave power.
A license allowing Chevron to keep operating its four joint ventures with PDVSA expires on July 27.
Guaido, the head of the opposition-controlled National Assembly, in January invoked the constitution to assume a rival presidency, arguing Maduro’s 2018 re-election was illegitimate.
In a decree published by his office, he said a possible decision not to extend the license “constitutes an event of force majeure’’ that could nonetheless “allow the illegitimate regime of Nicolas Maduro to take control of or expropriate the company’s assets.”
Once the sanctions are lifted, an event that presumably would not happen unless Maduro left power, “we will adopt all the measures that will allow Chevron Corporation and its affiliates in Venezuela to restart activities,” the decree said.
Guaido has been recognised as the rightful leader by most Western countries including the U.S., but he would have no ability to enforce the decree while Maduro remains in power.
The move comes as industry observers have speculated that Maduro could transfer control of Chevron’s assets, which include the Petropiar joint venture and crude upgrader in the extra-heavy Orinoco oil belt, to state-owned companies from Russia or China, which have continued to recognise Maduro.
Neither PDVSA nor Venezuela’s oil or information ministries immediately responded to a request for comment.
Chevron did not immediately respond to a request for comment.
Venezuelan authorities have not commented directly on what they would do if Chevron’s license is not extended. But in April, Venezuelan Foreign Minister, Jorge Arreaza praised Russia’s presence in the Orinoco belt and said that “companies that leave the oil belt will be substituted by companies of equal quality from Venezuela’s allies.”
Earlier this month, White House economic adviser, Larry Kudlow, said a possible renewal of the license was “under discussion.”
Chevron’s minority stakes in the Petropiar and Petroindependencia joint ventures in the Orinoco belt, as well as the Petroboscan and Petroindependiente joint ventures in western Venezuela, yielded net crude production of 44,000 barrels-per-day (bpd) for the company in 2018.
Venezuela produced 734,000 bpd in June, according to OPEC secondary sources, down from an average of 1.4 million bpd in 2018.
