(Bloomberg) -- Chevron Corp. is preparing to make its first shipment of Venezuelan crude to the US by late December under a license issued by the Biden administration, according to a person familiar with the matter.
Oil minister Tareck El Aissami and the head of Chevron in Venezuela, Javier La Rosa, met in Caracas Tuesday to hash out details of a series of contracts related to three joint ventures the company operates with state oil producer Petroleos de Venezuela SA, according to three people with direct knowledge of the deals, who asked not be identified because they weren’t authorized to discuss the situation. The contracts were set to be signed later this week, one of the people said.
Under the agreements, Chevron will take over operations at an oil upgrading facility where it will process about 1 million barrels of crude to be shipped to US refiners by late December, according to one of the people. The company will source its own diluents to mix with the sludgy Venezuelan oil and process crude from its own ventures as well as other PDVSA fields, the person said.
Washington on Saturday granted the San Ramon, California-based company a limited license to restart some work in Venezuela. It gives Chevron the ability to boost production at fields jointly operated with PDVSA and sell the oil to US refiners. The proceeds would go to pay down debt PDVSA has run up with Chevron.
A Chevron spokesman said in a statement that the company has periodic meetings with PDVSA and government representatives as permitted by the US Office of Foreign Assets Control, which issued the license. He declined to comment on the contracts.
Representatives for Venezuela’s oil ministry and PDVSA didn’t respond to requests for comment.
El Aissami said in a tweet that the agreements would “boost the development of joint ventures and oil production,” without providing further details.
Under the deals, Chevron would use the upgrader to produce Hamaca Blend -- a grade of heavy, tar-like crude from the Orinoco belt -- for shipment to refiners in the US, according to one of the people. PDVSA had been using some units of the upgrading facility to produce gasoline for the domestic market.
Chevron partners with PDVSA on four oil fields, which have seen production plummet to around 50,000 barrels a day from 160,000 barrels a day in 2018, according to a Bloomberg calculation of company data. The joint ventures have the capacity to increase production to as much as 200,000 barrels a day by the end of the year, according to one of the people.
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