CAF report indicates that the US is not considering revoking oil licenses from Venezuela

The CAF is aware of the situation in Venezuela / Photo: El Impulso

The Perspectives Report on Venezuela from the CAF Development Bank for Latin America indicates that the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury is not considering revoking Chevron‘s oil licenses in Venezuela, reported The Impulse.

The CAF has raised alarms about the instability facing the Venezuelan oil sector, warning of the possibility of stagnation in crude oil production during the second half of 2024, due to the uncertainty surrounding the renewal of licenses granted by OFAC. to Chevron.

Crude oil production in Venezuela depends on licenses

According to the report, prepared by the Office of the Chief Economist of the CAF, Reiner Schliesser, so far, the Joe Biden administration “has not given signs of wanting to revoke particular licenses already granted to international oil companies operating in association or as clients of PDVSA.

“The revocation or non-renewal of the license would significantly affect not only the crude oil production of these joint companies, but also the price of their exports, thus reducing the value of the country’s oil exports by up to 25%,” says the report.

A particular case is that of Chevron, to which OFAC granted a license to operate four joint ventures in association with PDVSA, which “concentrate more than two-thirds of the production covered by licenses.”

Oil production growth

The continuity of these operations is crucial for the recovery of Venezuelan oil production, which has shown signs of growth in the first months of the year.

The CAF warns that uncertainty over licenses is generating a slowdown in the growth of oil production for the third quarter.

«After growing 15% in the first six months of the year, growth in the last two months reaches 0.5%; and uncertainty is taking a toll on business and household confidence, driving decisions to postpone investment and consumption,” highlights a note from Petroguía.

Puerto La Cruz / Web Editorial