Chevron is seeking to protect a special US licence allowing it to operate in Venezuela, saying China and Russia will gain influence in the oil-producing nation — and the western hemisphere — if it is forced out by Donald Trump’s administration.
In an interview with the Financial Times, Chevron’s chief executive Mike Wirth said the company would engage with the White House after Marco Rubio, US secretary of state, said the licence should be reconsidered.
Wirth said Chevron would operate in compliance with US law and “stayed out of the politics” but added that if the US oil major exited it would allow rival nations’ state oil companies to expand in the Latin American country.
“In Venezuela, in particular, what you have seen when countries from the west leave, you’ve seen companies from China, from Russia, increase their presence as a result,” he said.
Chevron has operated in Venezuela for nearly a century, and its licenses to do so have been extended several times — including by the first Trump administration — even as the US has grown increasingly impatient with successive authoritarian regimes in Caracas and imposed economic sanctions to punish its leadership.
In 2022 Joe Biden’s administration granted a licence authorising Chevron to expand its Venezuelan business, in a show of good faith and hope of improving democratic conditions under authoritarian President Nicolás Maduro. Broad sanctions on the country’s oil sector were lifted in October 2023, allowing companies to do business with PDVSA, Venezuela’s state-owned oil producer.
But Maduro backtracked on a promise to allow the opposition to pick its own candidate in the presidential election last July, and the outcome, in which Maduro was declared the winner in a result widely regarded as fraudulent, have prompted critics on both sides of the political aisle to question whether western companies should still continue doing business there.
The sanctions were reimposed last April, though individual exemption licences, including Chevron’s, were kept in place.
That licence has enabled Chevron to boost its Venezuelan production to about 200,000 barrels a day.
Chevron, the second-biggest western oil company, had net income of $3.2bn in the fourth quarter compared with $2.2bn a year earlier, but adjusted earnings of $2.06 a share were below Wall Street estimates of $2.11. The company’s shares were down 3.9 per cent around midday in New York.
The group, which was a significant donor to Republican candidates in the recent election cycle, according to Open Secrets, used the phrase “Gulf of America” in its earnings material instead of Gulf of Mexico, just days after Trump called for the renaming of the body of water.
Venezuela’s opposition, led by María Corina Machado, has increased calls to cancel Chevron’s licence.
Speaking to the FT this month, Machado — who was banned from running in the election — warned Chevron and other foreign companies against “helping to prop up” Maduro’s government.
Rubio has signalled a tougher approach to the country. At his confirmation hearing this month, he told senators the Biden administration “got played” by Maduro.
Rubio said: “Now they have these general licenses where companies like Chevron are actually providing billions of dollars of money into the regime’s coffers, and the regime kept none of the promises that they made. So all that needs to be re-explored.”
When Maduro was sworn in for a third six-year term this month, the outgoing Biden administration, alongside the EU and the UK, announced co-ordinated sanctions on Venezuelan officials, though it stopped short of cancelling the exemption licences.
Some experts play down concerns that Chinese and Russian rivals could fill any gap left by Chevron.
Francisco Monaldi, a Latin America energy expert at Rice University in Houston, said Chinese and Russian oil companies are unlikely to make a move in Venezuela should Chevron leave.
“They haven’t done it during the past few years, and particularly since US sanctions have been in place, they have been very cautious,” Monaldi said.
Wirth said Chevron was owed a significant amount of money in Venezuela. “Look, we’re running a business. We don’t engage in foreign policy,” he said.
Meanwhile, rival oil major ExxonMobil on Friday reported forecast-topping adjusted earnings of $1.67 a share thanks to surging oil and gas production at its operations in the US and Guyana. Its shares were down 0.9 per cent in around midday.
Unlike many of its largest competitors Exxon is boosting investment and plans to increase production by almost a fifth by the end of the decade — a strategy that matches Trump’s “drill, baby, drill” rhetoric.
Kathy Mikells, Exxon’s chief financial officer, told the FT that “our base plan is to drive significant growth in production”.
“A large amount of that growth is coming out of the Permian to a lesser extent, but we’ll also be growing in Guyana as we’re bringing on more projects between now and 2030 . . . that was our plan, and has been our plan all along.”
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