Chevron gets three months for Venezuela operations

Venezuela has some of the world’s largest oil reserves, but has come under heavy pressure from Washington in an effort to oust President Nicolas Maduro. (Shutterstock)
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Updated 19 January 2020

Chevron gets three months for Venezuela operations

  • Oil giant to maintain loss-making operation despite heavy US import tariffs on Caracas

CARACAS: The US Treasury Department on Saturday granted permission for Chevron Corp, the last major US oil company operating in Venezuela, to continue working in the country until April 22.

The US imposed sanctions last year that barred imports of Venezuelan oil and transactions made in US dollars with Venezuela’s state-run oil company PDVSA, in move a designed to starve Caracas of oil dollars and oust President Nicolas Maduro.

The restrictions cut Venezuela’s oil exports by 32 percent last year, but Maduro has remained in power, supported by PDVSA and the country’s military.

Chevron and oilfield service firms Baker Hughes, Halliburton, Schlumberger, and Weatherford International have regularly received permission to remain in the country. The four oilfield service firms have largely ceased operations there.

The extension was a win for some Trump administration officials, including Secretary of State Mike Pompeo, who see value in keeping the company in Venezuela, which has the world’s largest reserves of oil.

Chevron has been in Venezuela for nearly a century and has kept about 300 direct employees there through years of turmoil. The company’s Venezuelan oil and gas production has been falling and was about 32,000 barrels per day during the most recent quarter for which figures were available.

A Chevron spokesman declined  to comment, whilst representatives for Baker Hughes, Halliburton and Schlumberger were not immediately available.

The company posted a $104 million loss on its Venezuela operations for the nine months ended Sept. 30, 2019. It would lose about $2.7 billion in assets if required to leave the country, Chevron said.

A 1 million-barrel cargo of Venezuelan crude consigned to Chevron was scheduled to load this month at Venezuela’s Jose port, according to internal PDVSA documents seen by Reuters.

The operation does not violate sanctions, and proceeds from the oil export are used by a joint venture to cover maintenance costs, Chevron said.

The Treasury Department said the license extension did not authorize transactions related to shipments of diluents, which Venezuela needs to thin its heavy oil for processing.

The US Treasury also issued a further license on Saturday, allowing transactions related to PDVSA’s 2020 bond, which is backed by shares in US refiner Citgo Petroleum Corp. The new license will take effect from April 22, replacing a previous license that last year had authorized transactions from Jan 22. 


Automechanika Riyadh opens, featuring leading global suppliers

Updated 25 February 2020

Automechanika Riyadh opens, featuring leading global suppliers

  • Saudi auto deals grew 40 percent last year with influx of female buyers

RIYADH: Leading names in the global auto services industry are out in force at Automechanika Riyadh — which opened on Monday at Al Faisaliah Hotel — vying to increase their share of a growing market expected to reach a value of $10.15 billion by 2023.

Automechanika Riyadh is the regional arm of the world’s largest trade fair, congress and event organizer, Messe Frankfurt, which has licensed the Automechanika brand to event organizer Al Harithy Company for Exhibitions (ACE) Group.

Mansour Abdullah Al-Shathri, vice chairman of the Riyadh Chamber of Commerce, inaugurated the trade event, which will run from Feb. 24-26.

It was revealed that Saudi auto deals grew approximately 40 percent last year, with female buyers accounting for between 10-15 percent of sales after the landmark decision to allow women to drive in the Kingdom for the first time.  

“International suppliers are stepping up their marketing for the resurgence in Saudi’s market, and this impacts the entire supply chain,” said Mahmut Gazi Bilikozen, show director for Automechanika Riyadh.

“While there is growth potential in the market, it is becoming a more competitive landscape and one which will also have to contend with evolving customer preferences. The conditions are ripe for new business relationships for those wishing to succeed in this transformative environment,” he added.

Zahoor Siddique, vice president of ACE, said: “Future vehicles will become more complex and challenging for the aftermarket industry. It is therefore imperative for manufacturers, local garages, technicians and mechanics to upskill and remain above the curve. 

 “Automechanika Riyadh is one such platform that can enable us to share and learn what the industry needs to unleash its potential.”

Two major US players — disc pad producer Giant Manufacturing and United Motors Mopar, the Kingdom’s sole distributor of Chrysler, Dodge, Jeep and Fiat cars — forecast a bullish market over the next few years.

Giant’s vice president, Eli Youssian, said he believed car sales in the Kingdom would grow by 9 percent annually until 2025, while United Motors District CEO Hassan Elshamarani expected another three million female drivers to be on the Kingdom’s roads by the end of the year.

Both Giant and United Motors launched new products at the show, with the former rolling out its new German-engineered Euro Premium Metallic Disc brake pads, and the latter introducing its Magneti Marelli spare parts.

The high potential of the new-look Saudi automotive landscape has also struck a major chord with South Korean suppliers.

The show’s Korean pavilion is hosting new-to-market entrants and existing suppliers all looking for business partners. With products from wiper blades to filters and air-conditioning parts to brake pads, the Korean contingent was positive about the Kingdom’s prospects.

One exhibitor, D Only Automotive, is looking to ring fence 10 percent of the Saudi brake market. “With more vehicles on the road, demand for brakes will increase, (so) we believe this is possible,” said President Jeon JaeWon.

Global research and analytics firm Aranca — Automechanika’s knowledge partner — has forecast that Saudi Arabia’s automotive spare parts and service market will grow at approximately 6 percent over the next five years to reach a value of $10.15 billion by 2023.

“The spare parts and service market for passenger cars alone is expected to eclipse $6.9 billion by 2023,” said Vishal Sanghavi, Aranca’s automotive practice head.