The US government has officially ordered oil giant Chevron to halt its operations in Venezuela, a heavy blow to the company's century-long operations in the OPEC-member nation. The directive was issued by the Trump Administration on Tuesday, asking the company to "wind down" its Venezuelan operations by December this year.
The order is part of the US' ongoing campaign to place economic pressure on Venezuelan President Nicolas Maduro's regime by starving it of cash and resources through sanctions and economic restrictions. Since the start of the campaign, all of the major oil producers have exited Venezuela except for Chevron, who still remained through a special license granted to it by the US Treasury Department.
A senior Trump administration official stated during an interview that the order is part of its ongoing maximum pressure campaign against the illegitimate regime. The hope is that by having Chevron limit its operations, Maduro will be deprived of further access to his financial lifelines, which he uses to fund his tyrannical hold over the country.
Despite the heavy sanctions placed on Venezuelan state-owned oil company PDVSA, Chevron was still allowed to collaborate with the firm to keep its production in the region operational. According to Chevron, the order given to it will not have a major impact on its finances but it will result in a huge loss for the company given the billions of dollars it had spent in establishing its operations in the country.
Chevron spokesman Ray Fohr mentioned in a statement that the company was still very much committed to ensuring the integrity of its joint venture assets and the wellbeing of its employees. In line with this, Chevron will be continuing its humanitarian programs for its workers and their families.
Venezuela currently has the world's largest proven oil reserves, with an estimated 296.5 billion barrels. Despite its vast untapped resources, the country's oil production has virtually collapsed following the ongoing humanitarian crisis and the heavy sanctions imposed against it by the United States and its allies.
The order given by the Trump Administration will not require Chevron to entirely abandon its operations, at least not immediately. The company did manage to just recently renew its license with the Treasury Department, albeit with slight adjustments to the scale of its operations.
Chevron stated that it will still be allowed to continue its essential operations in Venezuela at a limited capacity. The order also directly affects the operations of a number of oil service providers working with Chevron, namely Halliburton, Baker Hughes, Schlumberger, and Weatherford International.
