Oil frenemies

Biden looks to Maduro as US seeks to diversify its oil supply and Chevron licks its lips.

Communications between the US and Venezuela resumed last March, with a US delegation travelling to Caracas to meet with senior government officials in an effort towards repairing bilateral relations amid the global energy crisis triggered by Russia’s invasion of Ukraine.

Considering the status of global energy supply, the US is planning to ease sanctions on Venezuela to allow Chevron, the US oil giant, to resume oil extraction in the country and reopen Venezuela’s oil export market to the EU and US. In exchange, the US has been trying to get President Nicolás Maduro to engage in productive conversations with opposition leader Juan Guaidó to solve the political deadlock and economic crisis by establishing the basis of a free and fair election in 2024.

At present, the Biden administration continues to recognise Guaidó as Venezuela’s legitimate President, but opposition leaders feel abandoned after the US overture to Maduro’s regime. Biden has publicly stated his support for Guaidó and claims that he has been consulted about the ongoing communications with senior public officials in Caracas.

Guaidó recently showed his concern about Chevron’s request to operate in Venezuela having also reached an agreement with PDVSA, the Venezuelan state-owned oil company, to renovate their joint ventures. In an exclusive report, Reuters revealed that Guaidó asked both the US and PDVSA about the details of their ongoing negotiations. However, his leverage in the negotiations appears limited as he also continued to lose internal support when Venezuela’s main opposition parties announced their plan to compete in the 2024 elections.

“Guaidó has nothing to do with the negotiations with Chevron,” confirmed a local energy advisor with knowledge of the situation, “the Biden Administration is only keeping him minimally informed. Guaidó’s interim government has become a problem for Biden’s new strategy for Venezuela but I don’t expect that we will see decisive actions until after the US legislative elections. Moreover, all the main Venezuelan opposition parties, except Guaidó’s party Voluntad Popular, want the interim government to end but there is no solution yet.”

“Guaidó has nothing to do with the negotiations with Chevron, the Biden Administration is only keeping him minimally informed.”

Energy advisor, Venezuela

We expect Biden to continue isolating Guaidó as ultimately he needs the support of the Venezuelan opposition so that any deal with Maduro doesn’t look unilateral. A Venezuelan political analyst commented, “Both the Biden Administration and the Venezuelan opposition are seeking some symbolic concessions to politically justify an agreement with the Maduro government. In turn, although they are asking for it, I don’t expect that Biden or the opposition will obtain guarantees for a free presidential election in 2024, under any scenario.”

“Both the Biden Administration and the Venezuelan opposition are seeking some symbolic concessions to politically justify an agreement with the Maduro government.”

Political analyst, Venezuela

Meanwhile, Maduro sees the lifting of sanctions as a crucial step to improve Venezuela’s ruined economy. He affirmed at the latest September OPEC meeting that the country is ready and willing to supply the global oil and gas market in a stable and secure manner. Multinational oil companies are monitoring the situation while, since May, the Italian Eni and the Spanish Repsol have been shipping oil from Venezuela to the EU in an oil-for-debt swap after they received the green light from the US to resume their partnerships with PDVSA.

Granting Chevron a license could also be a huge win for oil services companies, as an executive of one such company confirmed, “There is no concrete information on Haliburton, Schlumberger, Baker Hughes and Weatherford, etc and their role in the framework of the possible licence for Chevron. However, I believe that it is very likely that once Chevron resumes full operations in Venezuela, the Biden Administration will also license the oil service companies as they will be needed, especially given the urgency to add new drills and rapidly increase production.”

Important Notice
While the information in this article has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or liability is or will be accepted by Deheza Limited or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or reasonableness of this article, or of any other information (whether written or oral), notice or document supplied or otherwise made available in connection with this article. All and any such responsibility and liability is expressly disclaimed.
This article has been delivered to interested parties for information only. Deheza Limited gives no undertaking to provide the recipient with access to any additional information or to update this article or any additional information, or to correct any inaccuracies in it which may become apparent.

Most recent in Energy

Methanol Marvel

Sinaloa's sustainable industrial revolution in Mexico.

Green horizons

Chile's ENAP and global partners forge the path to hydrogen future. 

Suriname’s oil dream

Total's investment sparks economic transformation.

The green Chile

Chile’s hot renewable energy aspirations...

IBAMA said no!

Brazil’s environment agency stops Petrobras from drilling in the Foz do Amazonas basin.

Batteries not included

With a new operating model, Bolivia dumps the Germans in favour of the Chinese to exploit its lithium reserves.

Petro against petroleum

Petro plans to accelerate Colombia’s energy transition with ban on new exploration contracts.

Renewable leadership

Latin America is aiming for 70% renewable energy but how is it progressing?

Water harvesting

Saint Kitts and Nevis look for rainwater harvesting sites to improve access to water.

Tricky transition

With an economy reliant on fossil fuels, Trinidad and Tobago’s energy transition isn’t easy.