The Latin American Report # 550

In my recent report on the agreement between Washington and Caracas that resulted in the simultaneous release of ten Americans detained in Venezuelan prisons, around 80 Venezuelan "political prisoners," and 252 Venezuelan migrants who were "housed" in El Salvador’s CECOT, I noted that once again, the Venezuelan government demonstrated its strong negotiating skills. And I said this without knowing that, in addition, Nicolás Maduro had secured the resumption of Chevron’s operations, suspended, it is said, after heavy pressure from the bloc of Cuban-American legislators and Marco Rubio himself, and in opposition to the pragmatic policy of special envoy Richard Grenell, who favors a more transactional approach and rejects to engage in regime change endeavors.

First of all, I suggest that Maduro made the return of the ten detained Americans—among whom, suspiciously, was a convicted murderer, responsible for a triple homicide in Spain—more expensive than it initially seemed, secretly including the Chevron issue. Of course, he is very aware that he holds a strong card in the oil market, and he plays it as much as possible. According to Spanish newspaper El Mundo, among the main factors driving this new policy reversal toward Venezuela is also the attempt to limit "Chinese influence" in Venezuela’s battered but always promising oil market, as the latest monthly report revealed that the Asian giant was absorbing nearly nine out of every ten barrels of Venezuelan oil.

But to me, it doesn’t rank among the top reasons. For example, the Venezuelan government's proactivity in pushing forward and surviving is probably a more relevant factor. In early June, amid the Houston-based company’s halted participation in oil pumping, Venezuelan state-owned PDVSA signed agreements with nine foreign companies, including two Chinese firms and one Argentine company, offering them guarantees to control the marketing of their share of production under a more attractive, tested scheme that experts claim is more advantageous for risk-taking investors. Thus, beyond the goal of deterring Chinese actors (a real White House interest), what has been more decisive here is the Chavista negotiating muscle—Maduro is not such a fool, and is flanked but people way more intelligent than the opposition’s main actors—, the interests of the oil sector in general, and figures like the Palm Beach-based mogul Harry Sargeant III in particular.

According to this Reuters report, the Trump administration could allow Chevron and potentially other European companies that have operated before alongside it, such as Italy’s Eni or Spain’s Repsol, "to pay oilfield contractors and make necessary imports to secure operational continuity." Chevron had been recovering part of PDVSA’s debts to it until the license cancellation last March, and its swift return will sustain and boost oil production, always, even if indirectly, generating a spillover effect on Venezuela’s economy. According to El Nuevo Herald, instead of a general license, a specific license would be issued this time.

Drawing a parallel with the Cuban case, I think the Island’s political leadership has some lessons to learn from its South American ally when it comes to negotiating capacity. It’s true that Cuba, so far, is not a hub that attracts enough interest from major lobbies like Venezuela does, which works in Caracas’s favor when sitting at the negotiating table with Washington. It’s also true that, although Rubio, Díaz-Balart, and company have taken up “the Venezuelan cause,” they are not as aggressive and determined in this case as they are with the Cuban issue, but I think the government here could explore and consider some options.