(AFP, 30.Nov.2022) — Venezuelan President Nicolas Maduro said the easing of an oil embargo on his country by the United States was not enough, and called Wednesday for the total lifting of sanctions.
The United States over the weekend granted energy giant Chevron a license to resume some oil operations in Venezuela — a step in the “right direction,” Maduro told a press conference.
But the move was “not enough for what Venezuela demands, which is the complete lifting” of sanctions against its oil industry, he said.
The US action on Saturday was in response to Maduro’s government signing a broad social accord with the Venezuelan opposition, as the two parties resumed formal negotiations on the country’s grinding political and economic crisis, and on elections set for 2024.
The deal, signed in Mexico, paves the way for the United Nations to oversee a trust fund of some $3 billion in frozen assets of the government led by Maduro, whose victory in contested 2018 elections was not recognized by Washington.
The funds will be used for social projects in the South American country, including programs related to education, health, food security, flood response and electricity.
The US Treasury Department said the accord marked “important steps in the right direction to restore democracy” in Venezuela, as it announced the six-month license to Chevron.
The relaxation of curbs on Chevron’s operations in Venezuela, which has the world’s largest oil reserves, would allow the nation to move toward re-entering global oil markets.
International efforts to resolve the Venezuelan crisis have gained strength since Russia’s invasion of Ukraine, which paced pressure on global energy supplies.
“The idea of removing Venezuela from the world’s economic circuit was a bad idea, an extremist idea by Donald Trump, and they are paying for it, because Venezuela is part of the global energy equation,” Maduro said Wednesday.
“No matter what, we have to be there, we are a great oil power and we are going to be a gas power.”
– ‘Limited’ impact –
However, analysts told AFP there would be “limited” impact on the international market as a result of the deal due to lean production capacity.
The joint ventures between Chevron and Venezuelan state firm PDVSA “could probably raise production in the next six months by about 50,000 to 60,000 barrels per day (bpd)” to 100,000 bpd, said Francisco Monaldi, director of the Latin American Energy Program at Rice University in Texas.
“But then (Chevron) would have to invest to get to full capacity, which is about 220,000, and that would take about two years.”
Pilar Navarro, Latin America Analyst at Medley Global Advisors, said Chevron did not seem to have “the appetite” — nor PDVSA the funds — to inject the needed capital to boost production above the some 200,000 bpd the companies put out before sanctions.
Venezuela’s production, which two decades ago was 3.2 million bpd, remains stagnant at around 700,000 bpd this year, according to OPEC.
The United States imported nearly 700,000 bpd from Russia in 2021, according to its energy agency, a quota impossible to cover with the Venezuelan supply capacity.
The eventual rebound in production of Chevron and PDVSA’s joint ventures is “important” for Venezuela, but “not significant for world production,” said Monaldi.
Venezuela’s political crisis has worsened since Maduro declared himself the victor of contested 2018 elections, which were widely seen as fraudulent, and generated widespread street protests.
Saturday’s accord in Mexico did not make headway on the crucial issue of the 2024 presidential election, which the opposition has demanded be free and fair.
Caracas wants the international community to recognize Maduro as the rightful president and to lift sanctions, particularly the US oil embargo and freeze on the nation’s overseas assets.
After the contested 2018 elections, almost 60 countries, including the United States, recognized opposition leader Juan Guaido as acting president.
However, Guaido’s influence has waned in recent years, and he has lost key allies both at home and in the region, where many countries have since elected leftist presidents.