(Bloomberg) -- Chevron Corp. must halt oil production in Venezuela immediately as U.S. President Donald Trump maneuvers for regime change in the Latin American nation.
The U.S. Treasury Department will no longer allow the company to drill wells, sell and buy crude oil or oil products or transport them, according to the Office of Foreign Assets Control. Chevron is authorized to ensure the integrity of operations and assets in Venezuela through Dec. 1. The decision also affects four U.S. oilfield service providers: Halliburton Co., Schlumberger Ltd., Baker Hughes Co. and Weatherford International Plc.
The Trump administration is ratcheting up pressure on Nicolas Maduro’s regime as the country reels from the Covid-19 pandemic and the lowest oil prices in a generation. It’s a bitter blow to Chevron and the company’s supporters within the U.S. government, who favored some level of American presence in Venezuela’s oil industry in the event of a political transition.
While Venezuela accounts for only about 1% of Chevron’s global crude production, it remains strategically important given the nation’s vast untapped reserves. Proponents of Chevron’s position argued that withdrawing would cede market share and influence to Russian and Chinese companies.
Production at Chevron and state-owned PDVSA’s Petropiar joint venture was down 58% in mid-March to 50,000 barrels a day, from 120,000 in January.
Chevron didn’t immediately return email seeking comment.
Chevron is the last remaining major U.S. explorer in the country. Rivals Exxon Mobil Corp. and ConocoPhillips exited a decade ago after then-President Hugo Chavez seized control of their assets.
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