Chevron CEO: Working to Comply with US Sanctions on Venezuela Crude

Chevron Corp continues to work with the U.S. government to comply with sanctions on Venezuelan crude oil exports, Chief Executive Michael Wirth said on Wednesday, days after winning a new license to expand its operations in the country.

U.S. President Joe Biden's administration last week authorized Chevron to boost oil output and expand operations in Venezuela. But the license restricts any cash payments to Venezuela pending further progress on talks between the government of President Nicolas Maduro and the country's opposition party over presidential elections and other issues.

"We'll work with our government to be sure we stay in compliance with those sanctions," Wirth said in remarks to the Boston College Chief Executives Club in Boston. "We've been trying to hang in there for a better day in Venezuela, to be part of building a better future for it. That's really what the opportunity is there."

Saturday's decision grants broader rights for the last big U.S. oil company still operating in U.S.-sanctioned Venezuela. The authorization is part of a U.S. plan to encourage further talks in Mexico between the two sides.

Terms of the license have irked Maduro and could reduce the oil available to export to the United States, analysts have said.

Speaking in Caracas on Wednesday, Maduro said the license to Chevron was a step in the right direction and called for "the total lifting" of sanctions on the country's oil industry. The U.S. measures contravene international trade, he said.

Wirth also said the world is adjusting to permanently changing trade flows in energy because of Russia's war with Ukraine.

Prior to Russia's February invasion of Ukraine, European policy makers had become heavily reliant on Russian supplies of natural gas, oil and refined products, he said.

"I don't think Europe will go back to that degree of vulnerability and reliance," Wirth said. "So you will see flows redistributed around the world."

He describes international energy trade as a global just-in-time system with little excess capacity that will not be able to permanently exclude Russian supplies.

Policy makers from the Group of Seven nations working to negotiate a cap on Russian seaborne crude oil "don't want to see Russia cut off," he said.

Wirth said proposals to tax the high profits energy companies are seeing this year, like one being proposed in Chevron's home state of California, would likely fail to achieve their goals.

"Raising taxes is not going to increase investment and bring more supply to market," he said. "It's likely to do the opposite."