Venezuela arrests mark further energy chaos

Chevron has evacuated executives from Venezuela after the arrest of company officials Carlos Algarra and Rene Vasquez last week, international media reported on Wednesday.

Following a report by Reuters, Chevron nevertheless said that its operations in Venezuela continued.

“Chevron has an executive team in place in Venezuela,” the company said in a statement cited by Fox News.

The exchange marks a fresh low in the relationship between the South American country and IOCs, amid a purge in Venezuela’s oil industry and following a bitterly disputed expropriation programme by its populist leftist government in the 2000s that left the country isolated and its economy in tatters.

Also on Wednesday, ConocoPhillips won a USD 2-billion arbitration award against Venezuela by a tribunal of the International Chamber of Commerce, becoming one of about 20 multinationals to have sued Venezuela over the nationalisation programme, the New York Times reported.

Enforcement, however, is elusive. On Monday, Halliburton announced that it was writing off the last USD 312 million of its investment in Venezuela, after similarly acknowledging the loss of USD 647 million last year. Rival oilfield services giant Schlumberger last year wrote off USD 938 million of assets in Venezuela.

The two Chevron executives were arrested after refusing to sign a contract with NOC PDVSA at prices they considered unfavourable, Reuters reported. The move could further exacerbate the chaos in the country’s oil industry.

“These detentions are going to accelerate the operational crisis,” an anonymous source told the agency. “Procurement could end up in paralysis if nobody wants to take the risk of signing or authorizing anything.”