Sources say that Chevron Vitol Trafigura are all competing to control Venezuelan oil imports.

Sources familiar with the situation say that Chevron, Vitol, Trafigura and other companies are competing to get deals from the U.S. Government to export crude oil from Venezuela.

Venezuelan officials are trying to control oil sales in the United States. This competition is a reflection of the desire for many oil companies to gain access to Venezuela's crude oil stocks and production.

Indefinitely

Donald Trump, the U.S. president, has demanded Venezuela grant the United States access to the oil sector. This comes just days after the U.S. seized the South American nation's President Nicolas Maduro. U.S. officials claim Washington will continue to control Venezuela's oil revenues and sales. Reports on Thursday said that Vitol, Trafigura and Chevron would be meeting at the White House with other major oil companies on Friday to discuss their possible roles in Venezuela's petroleum industry.

The companies have been lobbying hard for the U.S. Government to get a piece of what is expected to be lucrative oil-export agreements with Venezuela.

Companies are competing

initial deals

Two sources claim that the state-run PDVSA has accumulated up to 50,000,000 barrels of crude oil in its inventories due to a severe embargo on oil, which resulted in the seizure of four tankers.

PDVSA did not provide any details this week. Chevron is the main joint venture partner and the only major oil firm still operating in Venezuela.

Three sources claimed that Chevron would also be able to trade a portion of PDVSA production. For the first time since years, Chevron must now compete against other foreign oil companies.

PDVSA is looking to ensure that former customers and joint venture partners are included in the deal, so that it can repay its debt, increase output, and secure fair prices for the crude grades bound for certain?destinations.

The U.S. Department of Energy announced on Wednesday that it

Engaging with

The banks and commodity traders will execute and support the Venezuelan crude oil and fuel sales. The statement did not mention which companies.

Details of the competition for these contract had not been previously reported.

Sources requested anonymity in order to discuss confidential information. Vitol, Trafigura and other companies declined to comment. Chevron PDVSA and the White House didn't immediately respond to requests for comments.

TRADING HOUSES ENTRANT THE FRAY

Four sources confirmed on Thursday that Vitol, a company based in Geneva, has received an initial license from the U.S. Government to begin negotiating for the importation and exportation of Venezuelan oil for 18 months.

Vitol and Trafigura traded Venezuelan crude oil before the?U.S. In 2019, sanctions were imposed on the United States and some PDVSA partners. They marketed cargoes that they had received in previous years. They are able to quickly have tanker fleets and trade barrels in Venezuela, which is more than other companies currently operating in Venezuela.

"U.S. Majors are central in production, but larger international trading houses provide global reach and flexibility that majors do not have." It makes sense that these traders engage with the U.S. Government to discuss next steps, Jean-Francois Lambert from Lambert Commodities stated.

US INDEFINITE CONTROL OVER OIL SALES After the U.S. captured Maduro in January, the Trump administration began to focus on Venezuela's oil sector. Washington wants to maintain control of Venezuela's oil revenue and sales indefinitely. Trump said that he wanted U.S. firms to invest in Venezuela to rebuild its oil sector and?produce oil and lower global energy prices. Some oil executives are arranging to go to Caracas for initial assessments.

Analysts and executives in the industry have expressed skepticism due to Venezuela's degraded crude quality, political uncertainty, and its deteriorated infrastructure. U.S. Oil Majors want "serious assurances" before investing in Venezuela.

Venezuelan oil production has fallen to just 1 million barrels a day due to sanctions and years of underinvestment. In the 1970s, it was 3.5 million barrels a day.

Since 2019, only Chevron, India’s Reliance, Italy’s Eni and Spain’s Repsol, as well as Maurel & Prom in France, have been authorized by the U.S. government to receive Venezuelan oil.

China has been able to take the majority of Venezuelan oil exports in recent years through intermediaries that are little-known. China has not been able to import Venezuelan crude oil since last month, when the U.S. launched a naval blockade in Venezuelan waters. Reporting by Shariq KHan in New York, Marianna Parra and Arathy SOMASEKHAR in Houston, Dmitry Zhdannikov and Jarrett Renshaw, Washington DC. Editing by Richard Valdmanis & David Gregorio.

(source: Reuters)