Chevron receiving permission to expand production in Venezuela was ‘expected’


© Reuters. Chevron (CVX) receiving permission to expand production in Venezuela was ‘expected’ – analyst

By Senad Karaahmetovic

Chevron (NYSE:) has been allowed to resume and expand its production in Venezuela. The U.S. government’s Office of Foreign Assets Control (OFAC) granted 6-month permission to the country’s second-largest oil company to continue operating in Venezuela, although Chevron is still restricted to make any cash payments to state-owned company PDVSA.

Chevron said the decision “brings added transparency to the Venezuelan oil sector” and will allow it to benefit from sales of “oil that is currently being produced” by its joint ventures (JVs) with PDVSA. The company has four JVs operating in Venezuela, which produced about 200,000 barrels per day of crude oil combined.

According to Vital Knowledge analysts, the decision was expected.

“The Chevron/Venezuela news was somewhat expected and it won’t move the needle materially in global oil markets for quite some time,” analysts said in a note.

CVX shares are down 2% in pre-open Monday.

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