Chevron wins 90-day Venezuela sanction waiver extension

The Trump administration extended Chevron’s waiver to operate in Venezuela, allowing the second-largest U.S. oil explorer. Company has established new goals to reduce net greenhouse gas (GHG) emission intensity. Chevron U.S.A. Inc. announced it will donate $500,000 to help support local public schools. Company announced the sanction of a waterflood project in the St. Malo field. The toehold in the crisis-stricken Latin American nation as U.S. sanctions severely restrict crude exports. Company reported earnings of $4.3 billion for second quarter 2019, compared with $3.4 billion.

Company provided an overview of the company’s 2018 operational performance. Company announced a $5 million grant to Catalyst, a global nonprofit advancing workplace gender equality. The 90-day reprieve lets Chevron continue its role as the last major U.S. oil producer in the country until Jan. 22. reported earnings of $3.7 billion ($1.95 per share – diluted) for fourth quarter 2018. The Treasury Department on Monday also extended waivers for four U.S. oil services providers. Company announced a 2019 organic capital and exploratory spending program of $20 billion.

Muhammed Ghulam says “It looks like they’ve convinced the Trump administration that this is something that needs”.

The extension was the first granted since Trump fired former National Security Advisor John Bolton. Included in the current quarter were earnings of $740 million associated with the Anadarko merger termination fee. The company earned $14.8 billion last year, compared with $9.2 billion in 2017. It was seen as a vocal opponent of granting exceptions for U.S. companies doing business in Venezuela. It included $2.02 billion in tax benefits related to U.S. tax reform. Monday’s waiver was granted four days ahead of expiration, compared with a gap of just hours last time around.

The company intends to lower upstream oil net GHG emission intensity by 5 – 10 percent and upstream natural gas. Chevron’s joint ventures in the country are with Petroleos de Venezuela SA, the national oil company. Foreign currency effects increased earnings in the 2019 second quarter by $15 million. MARC is focused on engaging and empowering male executives and leaders to consistently model inclusive behaviors. There’s a desire within parts of the U.S. government to maintain some level of American presence in Venezuela’s oil industry.

Sales and other operating revenues in second quarter 2019 were $36 billion, compared to $40 billion in the year-ago period. 2019 budget supports a robust portfolio of upstream and downstream investments. The U.S. and dozens of other countries recognize National Assembly President Juan Guaido as the nation’s rightful leader. It expanding partnership with Catalyst to support an initiative that is helping Chevron create a more gender-inclusive workplace. Venezuela only accounted for 1% of Chevron’s global crude production last year.

Cash flow benefited from record quarterly production volumes and the receipt of the Anadarko merger termination fee. It remains strategically important as home to the world’s largest oil reserves. This is the single largest grant company received in organization’s 50+ year history. The investments are anchored in high-return short-cycle projects. Chevron’s oil-equivalent production of 3.04 million barrels per day was up almost seven percent from a year ago. Chevron made the case to the Trump administration that if it were to leave.

It’s Venezuelan assets could easily be turned over to another operator with little effect on overall production. It expect to continue to deliver steady production growth, enabling continued free cash flow. Production has exceeded three million barrels per day for the last two quarters. It could mean the state, or even Russian or Chinese interests, would benefit. The donation will be applied to help fund eligible classroom projects posted on DonorsChoose.org. Pragmatists who believed that not renewing the license would not lead to regime change.

Francisco Monaldi says “This seems again like a compromise between hardliners who wanted maximum pressure”.

Venezuela’s crude exports have been crippled by U.S. sanctions, falling to a 70-year low of 495,000 bpd in September. Company excited to continue strengthening partnership with Chevron, and we challenge others to join Catalyst. The policy’s apparent success is another reason why removing Chevron wouldn’t have much effect on the Maduro regime. MARC engages men and women in deep, honest dialogue where men gain insight, empathy. It included in the current quarter was an asset write-off totaling $270 million. The Chevron grant will directly support the global expansion of MARC Leaders.

Sanctions have been so effective in reducing sales that producing more is not necessarily going to help. Chevron’s near-century of operations in Venezuela included the crucial discovery of the Boscan field in the 1940s. Chevron expects to increase oil and natural gas production by 4 to 7 percent in 2019. Chevron was an early champion and pioneer of the MARC Teams strategy. The GHG emission intensity reduction metrics apply to all upstream Chevron oil and natural gas. It approximately $10.4 billion is forecasted to sustain and grow currently producing assets.

The California-based driller has outlasted many other oil companies. The St. Malo field is a world-class asset that is positioned for highly economic brownfield development. It left after a series of industry nationalizations during Hugo Chavez’s time as president. The strong portfolio of attractive investments is driving production and cash flow growth. The U.S. oil service companies have no desire to broaden beyond the tiny presence they’re maintaining in Venezuela. The strong financial and operational results reflect consistent execution.

The extension of the U.S. waiver allowing them to remain is ultimately helpful. The Chevron grant will allow Catalyst to continue its groundbreaking research. Sales and other operating revenues in fourth quarter 2018 were $40 billion. The global demand for energy continues to grow, and company committed to delivering more energy. It’s important to keep a toehold in the country in the event of a change of government down the road. Chevron will also serve as chair on the MARC Advisory Committee to help drive strategic expansion. $2.5 billion of planned capital spending is associated with the company’s downstream businesses.

It will be a massive opportunity for major oil companies. Chevron’s first financial priority continues to be maintaining and growing its dividend. It will need all the help that can get for service providers. The net oil-equivalent production grew more than 7 percent in 2018 to a record 2.93 million barrels per day. Chevron Corporation is one of the world’s leading integrated energy companies. Chevron is a member of the Oil and Gas Climate Initiative and is helping fund a $1+ billion effort. Venezuela’s oil output has fallen from a high of 3.7 MMbpd in 1970 to less than 700,000.

Facebook Comments