The news that US oil major Chevron’s license to resume pumping oil in Venezuela is being finalised by the Trump Administration has caught some by surprise. Last February, not long after his inauguration for a second term, Trump had cancelled several energy licenses in Venezuela, including Chevron’s, and set a deadline for winding down transactions by late May. The licenses had been originally cancelled by him during his first administration after Maduro flagrantly rigged the elections of 2018 but had been reinstituted by the Biden Administration after promises were made by Maduro to follow democratic principles in the July 2024 elections. Maduro then duly rigged these elections, which led to Trump’s February sanctions.
Unlike the 2019 sanctions, Chevron, however, had been allowed to maintain and service their equipment in the minority partnerships they had been relegated to when, in 2007, Hugo Chavez had seized control of the industry and awarded majority control to the state-run PDVSA. In May, Chevron had announced they would lobby the Trump Administration to renew their license since, in the absence of US oil companies, Chinese companies could fill the void. Last month, PDVSA reportedly signed at least nine new agreements with foreign service providers, including two Chinese companies, to maintain oil production hovering just under 1 million bpd and sustain foreign currency inflows following Chevron’s exit.
The fact that Chevron had been allowed to continue servicing their equipment – unlike the 2019 iteration – should have signalled that the option to have them resume production was on the cards. Back in 2007, unlike Chevron, Exxon had chosen to walk away and take the Venezuelan Government to the courts for compensation, which they duly received. This left PDVSA in control of joint venture operations, and Chevron developed very close relations with PDVSA’s executives that included many Maduro loyalists, including military officials. With Chevron now resuming production in Venezuela and having acquired Hess’ 35 per cent share of our Stabroek block, our Government now has two concerns.
Firstly, there is the matter of the Trump Administration’s relationship with the illegal Maduro regime in Venezuela, which has been waging an escalating hybrid war against us to wrest control of Essequibo. The second – and not unrelated – concern is control over the Stabroek Block, where China’s CNOOC has 25 per cent ownership, and combined with Chevron’s 35 per cent, they can outvote ExxonMobil. China is an “all-weather” ally of Venezuela and has championed its ambitions in the international arena – including membership in BRICS. Through Chevron’s now reactivated operations in Venezuela, Maduro would be able to influence Venezuela’s claims to Essequibo and our offshore oil, where he has already sent gunboats.
In reference to the US and our efforts to stave off the existential Venezuelan threat, as we have emphasised repeatedly in this space, we must always bear in mind Lord Palmerson’s aphorism made in the House of Commons on 1 March 1848: “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.”
It is up to the US Government to determine what their interests are and up to our Government to determine ours. In reference to Venezuela, successive Governments and their opposition parties have reiterated that Essequibo is theirs and they were robbed by the British and us. It is in our interest to hold off the Venezuelan threat to our sovereignty by any means necessary. Our Government has declared that it is deploying all of our instruments of national power – diplomacy, information, military, and economic (DIME) – towards this end. As part of our diplomatic efforts, we have submitted the Venezuelan Border controversy to the ICJ, where we expect a favourable ruling. But in an era of a breakdown of multilateralism, it is left to us to bolster our other efforts – especially in the military realm.
Up to now, the US has signalled they are an ally on the border controversy, but we can only count on them to the extent they see it in their interest to remain so.
