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Houston Energy Companies Caught in Political Tug-of-War Over Venezuela Sanctions

October 07, 2019

Frequent power outages, theft of equipment, a political tug-of-war and billions of dollars in losses would seem to signal to businesses that it’s time to get out of Venezuela.

But energy companies with headquarters or major operations in Houston — including the oil major Chevron and oilfield services firms Schlumberger, Halliburton, Baker Hughes and Weatherford — are instead scrambling to stay in the crisis-ridden South American country, pressing the Trump administration to renew waivers from U.S. sanctions that expire in about three weeks and allow them to continue operating there...

Venezuela was a top supplier of heavy crude oil to the United States for decades. Tensions between two nations grew after late socialist President Hugo Chavez nationalized oil fields leased by Exxon Mobil and ConocoPhillips in June 2007. Chavez died in March 2013. His hand-picked successor, Maduro, became interim president and held onto power in a disputed election late last year...

Crude output has plunged from 3 million barrels a day in 1999, when Chavez took office, to 885,000 barrels a day in June, according to the U.S. Energy Department...

Guillermo Zubillaga, an expert on Venezuela with the New York think tank Americas Society/Council of the Americas, said any possible economic recovery in the South American nation will rely on the oil sector with U.S. and European companies at the forefront.

"The anti-corruption, transparency, environmental and labor standards of U.S. and European is far superior than the one of Chinese and Russian companies," Zubillaga said.

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