Biden Administration’s Controversial Deal with Chevron and Venezuela

The Biden administration reportedly allowed Chevron to make significant payments to Venezuela despite existing prohibitions. This was through a supplementary waiver intended to facilitate compliance with U.S. law. While the partnership aimed to stabilize the Venezuelan economy, it has faced criticism for allegedly benefitting the Maduro regime without yielding the promised democratic reforms.

The Biden administration reportedly allowed Chevron Corp. to pay substantial sums, amounting to hundreds of millions, to the Venezuelan government, despite an existing license that forbade such transactions. According to sources privy to the situation, this was facilitated through a supplementary waiver issued in November 2022, allowing Chevron to comply with U.S. law while maintaining payments for oil royalties and taxes due to the Maduro regime.

Initially, the Treasury Department, via its Office of Foreign Assets Control, had granted Chevron limited operational permissions in Venezuela. In contrast, the Trump administration halted this arrangement, requiring Chevron to cease its operations in the country. Chevron, for its part, maintains that it operates in accordance with all laws and regulations, including those pertaining to sanction frameworks established by the U.S. government.

Under the general license provided, Chevron was authorized to extract and export Venezuelan crude oil; however, the license explicitly prohibited paying any taxes, royalties, or dividends to the Venezuelan government or its state-controlled entities. An undisclosed supplement allowed Chevron to make necessary payments to sustain its operations.

Last year, Chevron reported approximately $300 million in accrued taxes associated with its Venezuelan operations, drawing criticism from U.S. Representative Maria Elvira Salazar, who voiced disapproval over the waiver arrangement. After the nationalizations in the 2000s, which were executed by Hugo Chavez, Chevron remains the sole major U.S. oil company operating in Venezuela.

Sanctions imposed during the Trump administration had effectively halted Chevron’s operations until an agreement in 2022 allowed the company to return to Venezuela, contingent upon President Maduro committing to democratic elections. Although increased oil production did provide some economic stabilization, Maduro subsequently undermined much of the democratic progress he had promised, engaging in actions that curtailed opposition activity and resulted in widespread detentions.

U.S. Secretary of State Marco Rubio criticized the Biden administration, asserting they were misled, suggesting that the general licenses allowed Chevron to supply vast sums to the Maduro regime without resulting in any of the promised reforms. Juan Gonzalez, who previously directed Venezuela policy at the National Security Council, emphasized that revoking Chevron’s license could counterproductively drive Venezuelan oil sales to black markets, undermining U.S. interests and helping the Maduro regime financially.

Consequently, Chevron’s operations have become a focal point of scrutiny, particularly from Trump, who has issued a 30-day ultimatum for the company to end its joint ventures with state-owned PDVSA. Should the deadline be extended—reportedly under Chevron’s lobbying efforts—new conditions may dictate that tax and royalty revenues be allocated towards migrant deportation efforts rather than directly benefiting the Maduro regime.

In summary, the Biden administration’s modification of Chevron’s operational permissions in Venezuela highlights a complex interplay between U.S. foreign policy and economic interests. While promoting democratic processes, the administration’s actions have also raised concerns regarding financial support to the Maduro regime. This situation warrants continued scrutiny as it evolves, particularly regarding its implications for U.S. foreign policy, economic stability in Venezuela, and the future of American corporate involvement in the country.

Original Source: www.deccanherald.com