The US Treasury Department's recent directives have significant implications for Chevron, one of the foremost private oil companies operating in Venezuela. The Treasury has mandated that Chevron must wind down its operations in the country within just one month. This decision emerges alongside the issuance of a new license that imposes strict prohibitions on the company, effectively barring it from paying taxes and royalties to the Venezuelan government led by Nicolas Maduro. Specifically, the Office of Foreign Assets Control (OFAC) has set a deadline of April 3 for Chevron to terminate all joint ventures or associated operations in Venezuela.
Under the new regulations, Chevron is not only forbidden from remitting taxes or royalties to the Venezuelan government, but it is also prohibited from making dividend payments to Petroleos de Venezuela (PDVSA), the state-owned oil entity. Furthermore, any dividend payments to entities in which PDVSA maintains a 50% or greater interest are also banned under this directive. According to information available on its official website, Chevron considers itself a leading figure within Venezuela’s oil sector, managing numerous onshore and offshore production projects in collaboration with PDVSA.
In total, Chevron oversees five active production projects and has entered into four non-operated joint ventures alongside PDVSA, as well as three projects focused on heavy or extra-heavy crude oil. As this situation develops, Chevron has yet to issue a public statement addressing these substantial changes and the financial ramifications that could ensue. Current stock price for Chevron stands at $153.45, reflecting a slight increase of +0.36, or a percent change of +0.24..