President Joe Biden is finally allowing a U.S. oil company to expand exploration for crude.

Biden Allows Big Oil To Boost Drilling – In South America

President Joe Biden is finally allowing a U.S. oil company to expand exploration for crude.

President Joe Biden is finally allowing a U.S. oil company to expand exploration for crude.

In South America.

On Saturday, The Free Press reported that the Biden administration had approved a license that allows Chevron to boost production in Venezuela.

The company, which is the last major U.S. oil company still operating in Venezuela, can also “bring the South American country’s crude oil to the United States.”

But don’t start counting how much money you’ll save at the pump just yet. There’s a catch. A lot of them.

The decision “restricts any cash payments to Venezuela, which could reduce the oil available to export,” noted Reuters.

In short, Chevron cannot funnel any of the profits of its sales to the national government or Venezuela’s state-run oil company, whose proceeds help sustain the national economy.

Denying Venezuelan dictator Nicolas Maduro a taste will likely limit his cooperation. As Reuters reported, “Analysts cautioned that Maduro is likely to bristle at license restrictions, including the lack of cash payments that his administration sought.”   

The terms of the license also “bar Chevron from helping the OPEC member develop new oilfields,” Reuters reported. And that includes working with or paying the Russians, who are now big players in Venezuela’s oilfields. 

And while the permit also allows Chevron “to import supplies to help process the country’s crude oil into exportable grades,” some of the industry’s big dogs — Baker Hughes, Halliburton, Schlumberger and Weatherford International — received renewed but not expanded licenses.

“That limits any wider expansion of Venezuelan oil production,” Reuters noted.

Atop all that, Chevron’s license is good for only six months, although it could be extended afterward. But it also can be revoked at any time.

Francisco Monaldi, an expert on Latin American energy policy at Rice University’s Baker Institute for Public Policy, told Reuters “There is not a big incentive in the short term” for Maduro or Venezuela.

“We’ll see how Maduro’s government reacts to it and how many cargoes will be assigned to Chevron after,” Monaldi said.

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