MOSCOW (MRC) -- The US Treasury Department has recently extended for three months a sanctions waiver to Chevron and four US oil services companies allowing them to continue work in Venezuela, reported S&P Global.
Some within the Trump administration had pushed to allow the waiver to expire in order to ramp up pressure on Venezuela's Maduro regime. The waiver, which was scheduled to expire on January 22, now expires on April 22.
The three-month extension of the waiver was announced by Treasury after midnight Saturday.
The waiver allows Chevron, Halliburton, Schlumberger, Baker Hughes and Weatherford International to continue certain work with PDVSA, outside of US sanctions.
This will be the third three-month extension of that waiver, initially issued in January 2019, when the bulk of US sanctions on Venezuelan oil flows went into effect.
The waiver has been extended based on the argument that the presence of US companies is necessary to prevent the complete collapse of Venezuela's oil sector, easing an expected recovery once President Nicolas Maduro was forced out of power.
In a recent note, analysts with ClearView Energy Partners wrote that Maduro's persistent hold on power and his latest efforts to take over the National Assembly weaken the argument for allowing the waiver to stay in place. And, with a US presidential race approaching, the Trump administration may be "increasingly wary of the appearance of going soft on Maduro by offering sanctions leniency," these analysts said.
Some analysts claimed that Venezuela's oil output, which averaged 720,000 b/d in December, according to the latest S&P Global Platts OPEC survey, could plunge below 300,000 b/d if the waiver was allowed to expire. Others had argued that if Chevron and other US companies were forced out of Venezuela, Russian and Chinese firms would simply take over that work.
"If Chevron is forced to leave Venezuela, non-US companies will fill the void and oil production will continue," Ray Fohr, a Chevron spokesman, told S&P Global Platts earlier this month.
As MRC wrote earlier, Venezuela’s Petropiar facility, a joint venture between state oil company PDVSA and Chevron Corp, was once again operating last month as a crude upgrader after several months working as a less complex blending facility.
We remind that in March 2018, Chevron Phillips Chemical Company LP successfully introduced feedstock and commenced operations of a new ethane cracker at its Cedar Bayou facility in Baytown, Texas. At peak production, the unit will produce 1.5 million metric tons/3.3 billion lbs. per year.
Besides, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC