The US government has given Venezuelan-owned, Texas-based oil refiner Citgo another three-month lifeline, protecting it from creditors who are trying to seize it in compensation for missed debt repayments.
In a statement issued late on Friday, the Treasury also said it was giving Chevron and four oil service providers another three months to continue working in the crisis-wracked Opec nation.
Both agreements run until April 22.
Citgo lies at the heart of a long dispute involving US bondholders, Venezuela’s state-owned oil company PDVSA, the government of Nicolás Maduro and the rival administration led by opposition leader Juan Guaidó.
In 2016 PDVSA issued bonds, due to mature this year, using Citgo as collateral. Late last year it defaulted on the debt, prompting creditors to seek compensation.
But the US government says Citgo, which operates three refineries in the US, now belongs to the Guaidó administration and, in a bid to preserve it for a future in which Mr Maduro is no longer in power, it has taken steps to stop creditors getting their hands on it.
Earlier this month Washington reaffirmed its commitment to Mr Guaidó as the country’s legitimate interim president, despite his failure to remove Mr Maduro from power.
“This [the Treasury’s three-month extension] is in line with the US government continuing support with Guaidó and the interim government,” said Cecely Hugh, investment counsel at Aberdeen Standard Investments. “The negotiations for a settlement with the PDVSA 2020 bondholders are continuing and it would not make sense to derail these talks by lifting the ban on enforcement of the security.”
The decision to extend Chevron’s licence was also expected. The company has been working in Venezuela for almost a century and is the last major US oil company operating there. It has four joint ventures with PDVSA which between them produce about 200,000 barrels of crude per day (b/d) — more than a quarter of the country’s output.
A year ago, Washington effectively imposed an oil embargo on Venezuela in a bid to weaken Mr Maduro. It barred PDVSA from exporting oil to the US, stopped the import to Venezuela of diluents and urged oil companies elsewhere in the world to cut business with Caracas.
But it gave Chevron — along with Halliburton, Schlumberger, Baker Hughes and Weatherford International — a six-month waiver which it has repeatedly extended. Even so, the companies are still banned from exporting the diluents to Venezuela that the country needs to process its heavy crude.
Venezuela, a founding member of Opec, was once one of the world’s major providers of oil, pumping more than 3m b/d, but its output has crashed under Mr Maduro’s rule and is now about 700,000 b/d.