How have OFAC licenses and U.S. sanctions policy affected Chevron’s operations and legal options in Venezuela since 2023?

1. How licenses changed Chevron’s operational reality in 2023

OFAC’s general licenses such as GL41 and the October 2023 package (including GL44) authorized transactions that had been prohibited under prior policy, explicitly permitting Chevron to resume production and to export oil from its Venezuela JVs and thereby fueling oil production growth in 2023 ^{[1] [6] [2]}. The practical effect was constrained: licenses allowed activity only in existing Chevron projects and were designed to prevent expansion into new fields or a major surge in investment, meaning Chevron could incrementally raise output but not undertake broad new development ^{[3] [7]}.

2. Compliance architecture and the stated U.S. aims

Treasury framed the licenses as a tool to bring transparency and to channel Venezuelan oil sales through regular markets rather than illicit networks, with conditions intended to block direct benefit to PDVSA and the Maduro regime and to require enhanced due diligence for materials like diluents ^{[6] [3] [8]}. Proponents argued the presence of Western majors would displace shadowy operators and improve reporting of volumes and transactions ^[9].

3. Critiques, unintended revenue flows, and human‑rights concerns

Critics — including some analysts and human‑rights scholars — contend GL41 and related authorizations created a “black box” that allowed the regime to capture billions in revenue despite Treasury assurances, and that OFAC should have placed stronger transparency or human‑rights safeguards on authorized oil transactions ^{[10] [9]}. Independent estimates and policy critics warned licenses may have indirectly bolstered Maduro’s finances even as they sought to stabilize supply chains ^{[9] [10]}.

4. The policy pivot: revocations and wind‑down orders

That balancing act proved unstable: OFAC repeatedly warned licenses could be revoked and, by early 2024–2025, it began rescinding or amending key authorizations — revoking GL43 and later amending the Chevron authorization to require wind‑down — effectively narrowing Chevron’s lawful activities and obligating a managed exit rather than continued expansion ^{[1] [4] [5]}. The federal register and OFAC notices documented specific wind‑down general licenses and the regulatory text governing cessation ^{[5] [4]}.

5. Legal options available to Chevron under shifting sanctions

Legally, Chevron’s options were bounded by the text of OFAC licenses: while the company could lawfully perform transactions specifically authorized by a GL, it remained exposed to immediate loss of authorization, civil or administrative enforcement if it violated license terms, and constrained remedies if the U.S. government revoked permissions ^{[6] [4]}. Litigation alternatives are limited because OFAC licensing is an executive discretionary tool; Chevron could seek administrative relief or new licenses, but those routes depend on diplomatic and policy judgments beyond corporate control ^{[6] [4]}.

6. Strategic tradeoffs and political pressure shaping future choices

Chevron faced not only regulatory limits but also political pressure from U.S. lawmakers and Venezuelan opposition figures demanding suspension of licenses for allegedly funding the regime, a dynamic that fed OFAC’s policy reversals and left Chevron caught between operational gains and reputational, legal, and geopolitical risks ^{[9] [10]}. Treasury’s stated interest in using licenses as leverage — and its demonstrated willingness to withdraw them — made Chevron’s continued engagement a contingent, politically tethered strategy rather than a stable commercial pathway ^{[1] [10]}.