News wire — U.S. oil major Chevron Corp has dismissed around 20 employees in Venezuela as part of a global restructuring prompted by the sharp drop in crude prices, two people familiar with the matter said.
The move comes ahead of the Dec. 1 expiration of Chevron’s license to continue operating in Venezuela despite U.S. sanctions on state oil company Petroleos de Venezuela, part of the Trump administration’s efforts to choke off revenue to President Nicolas Maduro’s government.
A Chevron spokesman confirmed that the company was making an “organizational adjustment” in Venezuela, as part of the global reduction in headcount by 10-15% prompted by the crude price plunge and drop in oil and gas demand spurred by the COVID-19 pandemic.
The spokesman said the change “does not change the company’s long term view on our activities” in Venezuela, where it hopes to “return to normal activities in due course.”
Before the layoffs, the company had about 300 direct employees in Venezuela, an OPEC member with some of the world’s largest crude reserves, but which has for years been mired in an economic collapse. The firm has minority stakes in four oil joint ventures with PDVSA and operates an offshore gas exploration block.
The U.S. government granted Chevron and a handful of U.S. oilfield services companies licenses to maintain operations in Venezuela when it sanctioned PDVSA last year, which it subsequently renewed several times.
But in April, the government issued a stricter license barring the company from drilling in the nation or trading Venezuelan oil, while allowing it to hold onto its assets. Chevron impaired the $2.6 billion value of those assets in July.
The Chevron spokesman said the company remained “hopeful” the license would be renewed, but did not specify under which terms. The Treasury Department, which enforces sanctions, did not immediately respond to a request for comment.
(Reporting by Gary McWilliams in Houston, Marianna Parraga in Mexico City, and Timothy Gardner in Washington; Additional reporting and writing by Luc Cohen in New York; Editing by Nick Zieminski)