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The Biden administration confirmed Saturday that it will easing some oil sanctions on Venezuelaincluding the granting of Chevron (NYSE:CVX) license to continue “limited” oil production in the country after US sanctions stopped all drilling there three years ago.
The repeal order came after the government of Venezuelan President Maduro and a coalition of political opponents agreed to implement a humanitarian relief program and resume talks in Mexico City over holding elections. free and fair election.
Chevron (CVX) was awarded a six-month license from the U.S. Treasury Department allowing the company to produce crude oil and petroleum products in its projects in Venezuela, operated in conjunction with state oil company PDVSA.
No new drilling is allowed, but Chevron (CVX) will be able to repair and perform maintenance on oil fields, and it will be allowed to continue exporting crude oil from the country.
PDVSA will not receive a profit from the sale of oil, as the proceeds will be used to repay the old debt to Chevron (CVX).
Before the US ordered a complete halt to drilling in 2020, Chevron’s (CVX) Venezuela’s share of crude oil production is 15 thousand barrels/day.
The decision also allows U.S. oil service providers Halliburton (HAL), Schlumberger (SLB), Baker Hughes (BKR) and Weatherford International (WFRD) to restart work in Venezuela.
Chevron (CVX) stock has become expensive, “trading at a valuation where it needs double-digit highs over the long-term, which history shows is unlikely,” The Value Portfolio wrote in a report. . Analysis recently posted on Seeking Alpha.
