News round-up, May 10, 2023
Most read…
The Vindication of E. Jean Carroll
In response to a writer’s accusation of sexual assault, nine jurors in Manhattan finally held Donald Trump accountable.
THE NEW YORKER By Eric Lach, May 9, 2023Big Oil Has $150 Billion in Cash and Investors Want a Share
Companies boost shareholder returns and keep funds for when the boom goes bust
WSJ By David Uberti, May 8, 2023 Vladimir Putin Is the World’s Most Dangerous Fool
That's a big issue because that's where this war started, and it didn't come from his cabinet or military leaders, as we now know, and it certainly didn't come from the Russian people as a whole. Therefore, whether Russia wins or loses in Ukraine, it will only be halted if Putin decides.
THE NEW YORK TIME, Opinion Columnist By Thomas L. Friedman, May 9, 2023Explainer: How will China's clampdown on mislabelled cargoes affect sanctioned oil?
In the past year, a group of Chinese refiners nicknamed "teapots" have become the leading purchasers of Iranian and Venezuelan oil. These independent refiners make up over 20% of China's crude imports and have secured deals with these countries despite international sanctions.
REUTERS By Chen Aizhu and Muyu Xu/ Editing by Germán & CoExclusive: Chevron aims to boost Venezuela oil output to accelerate debt recovery -sources
PDVSA and the Venezuelan oil ministry did not respond to requests for comment. In accordance with "all rules and regulations, as well as the sanctions framework supplied by the U.S. Office of Foreign Assets Control," Chevron stated it will continue to operate.
REUTERS By Marianna Parraga and Deisy Buitrago/ Editing by GermÁn & CoThe west must be ready for this moment of opportunity and risk in Ukraine
Ukrainians are preparing for a make-or-break counteroffensive. They have a theory of victory. Do we?
The Guardian by Timothy Garton Ash, Wed 10 May 2023 
Andrés Gluski, CEO of energy and utility AES CorpHow can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…
The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.
Today's events
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“E. Jean Carroll wasn’t hiding anything,” Carroll’s lead lawyer said on Monday, as her lawsuit against former President Donald Trump reached its conclusion. Photo: Editing by Germán & CoThe Vindication of E. Jean Carroll
In response to a writer’s accusation of sexual assault, nine jurors in Manhattan finally held Donald Trump accountable.
THE NEW YORKER By Eric Lach, May 9, 2023Famously, Donald Trump once fantasized about committing murder on the street outside his apartment. “I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose any voters,” he said, during a 2016 campaign stop in Sioux Center, Iowa. In the recent civil trial that the writer E. Jean Carroll brought against Trump in New York, she didn’t accuse the former President of shooting her outside Trump Tower. She said that he had raped her, just up the block, in the nineteen-nineties. A jury in Manhattan, after listening to the evidence presented to them during the past two weeks, awarded her five million dollars in damages in a civil battery and defamation case. (They stopped short of branding Trump a rapist, settling for a definition of “battery” that includes “sexual abuse.”)
Carroll, a former advice columnist for Elle and media personality, went public with her allegations in 2019, in a New York magazine article, in which she wrote that Trump forced himself on her in a Bergdorf Goodman dressing room. When she first filed a lawsuit against Trump, a few months after the article ran, he was still the President, and many considered the suit hopeless. How could a private citizen get justice through the courts in a case like this, against Trump of all people? And yet on Tuesday, Carroll was vindicated, in a trial that marks the first time jurors have been tasked with determining whether a former President was a rapist or merely a sexual abuser.
Carroll’s lawyers called Carroll herself to the stand (she was also cross-examined by Trump’s lawyers for two days), and then called two friends whom Carroll told about the encounter with Trump shortly after it happened. They also called two other women who have publicly accused Trump of sexual assault—Jessica Leeds and Natasha Stoynoff—as well as an expert in psychological trauma, and two former employees of Bergdorf Goodman, who both supported elements of Carroll’s account, with one testifying that he had seen Trump in the store. Trump skipped the trial, and his lawyers called no witnesses of their own. Joseph Tacopina, Trump’s lead lawyer, said that his client didn’t need to mount a defense, because his case had “emerged” through cross-examination of Carroll’s witnesses. He also pointed to dredged-up text messages and e-mails in which Carroll’s friends seemed to express concerns and frustrations with her. And he offered a number of implausible counter-theories, such as one in which Carroll and her friends had concocted a scheme to frame Trump based on the plot of a 2012 episode of “Law & Order: SVU.” Carroll’s lawyers made much of Trump’s absence. They also didn’t shy away from politics. Several times during the trial, they played the contents of the “Access Hollywood” tape for the jury, including Trump’s boasts of grabbing women “by the pussy.” During closing arguments, one of Carroll’s lawyers suggested to the jury that they consider the “Access Hollywood” video a “confession.”
“You saw for yourself, E. Jean Carroll wasn’t hiding anything,” Roberta Kaplan, Carroll’s lead lawyer, told the jury on Monday, as the trial reached its conclusion. As her lawyers readily acknowledged, Carroll could not remember exactly what night her encounter with Trump took place. She could find no witnesses who saw the two of them together. And though she told two friends about the assault soon after it occurred, she otherwise kept the story to herself for more than two decades. Trump’s lawyers argued that these gaps undercut Carroll’s credibility. “What they want is for you to hate him enough that you’ll ignore the facts,” Tacopina told the jury during his own summation. Carroll, Tacopina said, was abusing the system, bringing a false claim. “We cannot let her profit to the tune of millions of dollars.” Those lines might have played well with Tacopina’s client, but they didn’t sway the jury, which unanimously found in Carroll’s favor after less than three hours of deliberation. (Trump told Fox News Digital that he plans to appeal, and has “no idea” who Carroll is.)
Trump, despite his denials, appeared to understand the seriousness of Carroll’s claims, as both a legal matter and a political one. “She’s accusing me of rape, of raping her, the worst thing you can do, the worst charge,” he said, in a deposition taken last year. Trump is once again running for President, and recent polling suggests that his opponents in the Republican primaries are wilting in the face of his popularity and the pressure he puts on others to fight on his terms. And yet every month this year has brought escalating legal peril to Trump. Seven years ago, he imagined what his supporters would do if he committed a heinous act on Fifth Avenue. Now it’s no longer hypothetical. It’s a matter of record. ♦
PHOTO ILLUSTRATION BY EMIL LENDOF/THE WALL STREET JOURNAL/Editing by Germán & CoBig Oil Has $150 Billion in Cash and Investors Want a Share
Companies boost shareholder returns and keep funds for when the boom goes bust
WSJ By David Uberti, May 8, 2023 Oil-and-gas companies have built up a mountain of cash with few precedents in recent history. Wall Street has a few ideas on how to spend it—and new drilling isn’t near the top of the list.
Many companies are cutting costs and raining cash on stock pickers like Berkshire Hathaway’s Warren Buffett, who believe the world’s thirst for oil will continue for years, if not decades, to come. The promise of money returned to shareholders helped turn energy shares into some of the few bright spots in a dark moment for markets last year, fueled by commodity prices that skyrocketed after Russia’s invasion of Ukraine.
Even as an uncertain economic outlook has weighed on crude in 2023, making the energy sector the S&P 500’s worst performer, cash has continued flowing. Companies that previously chased growth and funneled money into speculative drilling investments, weighing down their stocks, have instead tried to appease Wall Street by boosting dividends and repurchasing shares.
The cash has helped make up for stock prices that often seesaw alongside volatile commodity markets. Steady returns also buoy an industry with an uncertain long-term outlook as governments, markets and the global economy gradually shift toward cleaner energy.
“They’ve paid dividends forever. That’s been a hallmark,” said Rob Thummel, managing director at Tortoise, an energy investment firm. “But now there’s excess cash beyond dividends to do buybacks.”
Source: FactSetSix companies often described as Big Oil—Italy’s Eni, France’s TotalEnergies TTE -0.60%decrease; red down pointing triangle, the U.K.’s Shell SHEL -0.03%decrease; red down pointing triangle and BP BP -0.11%decrease; red down pointing triangle, and domestically headquartered Chevron CVX -0.29%decrease; red down pointing triangle and Exxon Mobil XOM 0.03%increase; green up pointing triangle—reported nearly $160 billion in cash and cash equivalents across their balance sheets at the end of the first quarter. State-owned companies and smaller businesses have tens of billions more.
Chevron and Exxon Mobil hold $48.3 billion of such assets, up $1 billion from the beginning of the year, according to FactSet. Before the cash pileup in recent months, the last time they collectively surpassed $40 billion was in the final weeks of George W. Bush’s presidency as U.S. crude neared the end of a monthslong retreat from a record $145 a barrel.
Oil profits last year ballooned after Russia’s war on Ukraine pushed up prices and turned gasoline into a street-level reminder that inflation neared 40-year highs. As benchmark U.S. crude prices have dropped 8.8% this year, to $73.16 a barrel, international oil majors, U.S. fuel-makers, independent drillers, Texas wildcatters and Appalachian frackers have kept gobs of cash on hand—partially as insurance if the slide continues.
“We know the good times don’t last,” Chevron Chief Financial Officer Pierre Breber told analysts in an earnings call.
President Biden has called on producers to ramp up output in a bid to lower prices at the pump. “These balance sheets make clear that there is nothing stopping oil companies from boosting production except their own decision to pad wealthy shareholder pockets and then sit on whatever is left,” White House Assistant Press Secretary Abdullah Hasan said.
But investors have favored financial discipline, and executives are increasingly compensated based on shareholder returns. It marks an about-face in the U.S. oil patch, where companies for years chased production growth by tapping gushers of crude in regions such as the Permian Basin in Texas and Bakken shale in North Dakota.
By June 2020, as the pandemic brought parts of the country to a standstill, Chevron and Exxon Mobil had together devoted more cash to capital expenditures than shareholder returns for at least 28 straight quarters, according to FactSet. The ratio has been the opposite every quarter since, with the companies paying out $14.8 billion in dividends and buybacks in the first three months of this year, compared with $8.4 billion in capital investment.
Source: FactSetMr. Breber said the San Ramon, Calif.-based Chevron, which boasts almost $15.7 billion in cash and cash equivalents, could operate with a balance sheet one-third the size.
“We want to return it [to shareholders] through the cycle in a steady way,” he told analysts.
Other U.S. companies have more recently followed the majors’ lead. At ConocoPhillips COP 0.62%increase; green up pointing triangle and 48 smaller publicly traded oil-and-gas firms, executives in the fourth quarter of 2022 funneled 42% of the cash they used into shareholder returns, according to an analysis of financial disclosures by Evaluate Energy. Capital investments comprised 35% of such funds in that period—down from 67% in the first quarter of 2020.
“U.S. oil-and-gas producers are less focused on capital spending than they have been in years,” said Mark Young, a senior analyst at Evaluate Energy.
The cash buildup owes itself to other factors as well. Many companies have paid off debt racked up during growth mode, when they dug much of the top-tier territory for wells. While some companies have pledged huge sums to carbon-capture technology or hydrogen production, clean-energy investment has been slowed by lower expected returns and the wait for yet-to-be-finalized regulations in Mr. Biden’s climate package.
Large companies such as Exxon Mobil have also explored acquisitions to scoop up independent or privately held drillers with faster-growing shale output, The Wall Street Journal has reported.
Exxon dwarfed other U.S. companies in the first quarter with nearly $32.7 billion cash on hand, up about $3 billion from the end of last year. With yields on short-term investments such as Treasurys higher than what Exxon pays on its debt, “we’re not incurring a negative cost of carry on that cash balance,” Chief Financial Officer Kathryn Mikells told analysts on an earnings call.
That financial reality, brought on in part by Federal Reserve interest-rate increases aimed at slowing the economy, is changing the idea of what makes an optimal balance sheet for oil companies in an unpredictable market, said Sam Margolin, an analyst at Wolfe Research.
“It definitely takes the pressure off of trying to jettison cash as quickly as possible,” he said.
Image: by Germán & CoVladimir Putin Is the World’s Most Dangerous Fool
That's a big issue because that's where this war started, and it didn't come from his cabinet or military leaders, as we now know, and it certainly didn't come from the Russian people as a whole. Therefore, whether Russia wins or loses in Ukraine, it will only be halted if Putin decides.
THE NEW YORK TIME, Opinion Columnist By Thomas L. Friedman, May 9, 2023I have not written much about the war in Ukraine lately because so little has changed strategically since the first few months of this conflict, when three overarching facts pretty much drove everything — and still do.
Fact No. 1: As I wrote at the outset, when a war of this magnitude begins, the key question you ask yourself as a foreign affairs columnist is very simple: Where should I be? Should I be in Kyiv, the Donbas, Crimea, Moscow, Warsaw, Berlin, Brussels or Washington?
And from the start of this war, there has been only one place to be to understand its timing and direction — and that’s in Vladimir Putin’s head. Unfortunately, Putin doesn’t grant visas to his brain.
That’s a real problem because this war emerged entirely from there — with, we now know, almost no input from his cabinet or military commanders — and certainly with no mass urging from the Russian people. So Russia will be stopped in Ukraine, whether it’s winning or losing, only when Putin decides to stop.
Which leads to fact No. 2: Putin never had a Plan B. It’s now obvious that he thought he was going to waltz into Kyiv, seize it in a week, install a lackey as president, tuck Ukraine into his pocket and put to an end any further European Union, NATO or Western cultural expansion toward Russia. He would then cast his shadow across all of Europe.
This leads to fact No. 3: Putin has put himself in a situation where he can’t win, can’t lose and can’t stop. There’s no way he can seize control of all of Ukraine anymore. But at the same time, he can’t afford to be defeated, after all the Russian lives and treasure he has expended. So he can’t stop.
To put it differently, because Putin never had a Plan B, he’s defaulted to a punitive, often indiscriminate rocketing of Ukrainian towns and civilian infrastructure — a grinding war of attrition — with the hope that he can somehow drain enough blood from Ukrainians, and instill enough exhaustion in Kyiv’s Western allies, that they give him a big enough slice of Russian-speaking eastern Ukraine he can sell to the Russian people as a great victory.
Putin’s Plan B is to disguise that Putin’s Plan A has failed. If this military operation had an honest name, it would be called Operation Save My Face.
Which makes this one of the sickest, most senseless wars in modern times — a leader destroying another country’s civilian infrastructure until it gives him enough cover to hide the fact that he’s been a towering fool.
You can see from Putin’s Victory Day speech in Moscow on Tuesday that he is now grasping for any rationale to justify a war he started out of his personal fantasy that Ukraine is not a real country but part of Russia. He claimed his invasion was provoked by Western “globalists and elites” who “talk about their exclusivity, pit people and split society, provoke bloody conflicts and upheavals, sow hatred, Russophobia, aggressive nationalism and destroy traditional family values that make a person a person.”
Wow. Putin invaded Ukraine to preserve Russian family values. Who knew? That’s a leader struggling to explain to his people why he started a war with a puny neighbor that he says is not a real country.
You might ask, why does a dictator like Putin feel he needs a disguise? Can’t he make his people believe whatever he wants?
I don’t think so. If you look at his behavior, it seems that Putin is quite frightened today by two subjects: arithmetic and Russian history.
To understand why these subjects frighten him, you need to first consider the atmosphere enveloping him — something neatly captured, as it happens, in lyrics from the song “Everybody Talks” by one of my favorite rock groups, Neon Trees. The key refrain is:
Hey, baby, won’t you look my way?
I can be your new addiction.
Hey, baby, what you got to say?
All you’re giving me is fiction.
I’m a sorry sucker, and this happens all the time.
I find out that everybody talks.
Everybody talks, everybody talks.
It started with a whisper.
One of the biggest lessons I’ve learned as a foreign affairs writer reporting from autocratic countries is that no matter how tightly controlled a place is, no matter how brutal and iron-fisted its dictator, EVERYBODY TALKS.
They know who is stealing, who is cheating, who is lying, who is having an affair with whom. It starts with a whisper and often stays there, but everybody talks.
Putin clearly knows this, too. He knows that even if he gets a few more kilometers of eastern Ukraine and holds Crimea, the minute he stops this war, his people will all do the cruel arithmetic on his Plan B — starting with subtraction.
The White House reported last week that an estimated 100,000 Russian fighters have been killed or wounded in Ukraine in just the past five months and roughly 200,000 killed or wounded since Putin started this war in February 2022.
That is a big number of casualties — even in a big country — and you can see that Putin is worried that his people are talking about it, because, beyond criminalizing any form of dissent, in April he rushed through a new law cracking down on draft dodging. Now anyone who doesn’t show up will face restrictions on banking, selling property, even getting a driver’s license.
Putin would not be going to such lengths if he was not fearful that, despite his best efforts, everyone was whispering about how badly the war is going and how to avoid serving there.
Read the recent essay in The Washington Post by Leon Aron, a historian of Putin’s Russia and a scholar at the American Enterprise Institute, about Putin’s visit in March to the Russian-occupied Ukrainian city of Mariupol.
“Two days after the International Criminal Court charged Putin with war crimes and issued a warrant for his arrest,” Aron wrote, “the Russian president came to Mariupol for a few hours. He was filmed stopping by the ‘Nevsky microdistrict,’ inspecting a new apartment and listening for a few minutes to the effusively grateful occupants. As he was leaving, a barely audible voice is heard on the video, crying out from a distance: ‘Eto vsyo nepravda!’ — ‘It’s all lies!’”
Aron told me that the Russian media later scrubbed “It’s all lies” from the audio, but the fact that it had been left in there may have been a subversive act by someone in the official Russian media hierarchy. Everybody talks.
Which leads to the other thing Putin knows: “The gods of Russian history are extremely unforgiving of military defeat,” Aron said. In the modern era, “when a Russian leader ends a war in a clear defeat — or with no win — usually there is a change of regime. We saw that after the first Crimean War, after the Russo-Japanese war, after Russia’s setbacks in World War I, after Khrushchev’s retreat from Cuba in 1962 and after Brezhnev and company’s Afghanistan quagmire, which hastened Gorbachev’s perestroika-and-glasnost revolution. The Russian people, for all their renowned patience, will forgive a lot of things — but not military defeat.”
It’s for these reasons that Aron, who just finished a book about Putin’s Russia, argues that this Ukraine conflict is far from over and could get a lot worse before it is.
“There are now two ways for Putin to end this war he cannot win and cannot walk away from,” Aron said. “One is to continue until Ukraine is bled dry and/or the Ukraine fatigue sets in in the West.”
And the other, he argued, “is to somehow force a direct confrontation with the U.S. — bring us to the precipice of an all-out strategic nuclear exchange — and then step back and propose to a scared West an overall settlement, which would include a neutral, disarmed Ukraine and his holding on to the Crimea and Donbas.”
It’s impossible to get into Putin’s head and predict his next move, but color me worried. Because what we do know, from Putin’s actions, is that he knows his Plan A has failed. And he will now do anything to produce a Plan B to justify the terrible losses that he has piled up in the name of a country where everybody talks and where defeated leaders don’t retire peacefully.
Thomas L. Friedman is the foreign affairs Op-Ed columnist. He joined the paper in 1981, and has won three Pulitzer Prizes. He is the author of seven books, including “From Beirut to Jerusalem,” which won the National Book Award. @tomfriedman • Facebook
Source: MediaExplainer: How will China's clampdown on mislabelled cargoes affect sanctioned oil?
In the past year, a group of Chinese refiners nicknamed "teapots" have become the leading purchasers of Iranian and Venezuelan oil. These independent refiners make up over 20% of China's crude imports and have secured deals with these countries despite international sanctions.
REUTERS By Chen Aizhu and Muyu Xu/ Editing by Germán & CoSINGAPORE, May 4 (Reuters) - Chinese customs authorities are stepping up inspection checks on cargoes of heavy crude oil after uncovering several Iranian shipments that were mislabelled as diluted bitumen in an effort to bypass import quotas.
The checks, begun a month ago, are delaying oil discharges into the eastern refining hub of Shandong province.
They are also adding to uncertainty over the risk of disruption to shipments from Iran and Venezuela, while cutting into refining operations just as fuel demand recovers.
China's independent refiners known as teapots, which account for more than a fifth of its crude imports, have become top customers of Iranian and Venezuelan oil since late 2019.
That has followed tough U.S. sanctions on the two exporters, which have supplied China for more than two decades.
The Chinese refiners have increasingly decoupled from the mainstream global oil market to focus almost solely on discounted oil from Iran and Venezuela, and more recently Russian oil in the aftermath of Moscow's invasion of Ukraine.
China has repeatedly condemned Washington's unilateral sanctions and defended trade with Iran and Venezuela as normal business practice in line with international law.
WILL THE CHECKS WIDEN TO ALL IRANIAN CARGOES?
This is unlikely. Traders said they believed the checks were technical rather than political, and aimed to regulate the domestic market and toughen scrutiny of the use of crude oil quotas.
Beijing sets no quotas for state-run refiners, but allots them for independent plants, recently giving greater volumes to "mega" private refiners while cutting back on quotas for smaller plants.
The inspections have primarily targeted shipments of oil with density of less than 950 kg a cubic metre (kg/m3) - mostly Iranian heavy crudes Pars Oil and Soroosh - that account for about 10% to 20% of the Middle East nation's oil into China, compared with dominant Iranian Light and Iranian Heavy.
China's Iranian oil imports, often branded as originating from Malaysia, Oman or the United Arab Emirates, were estimated at 640,000 barrels per day (bpd) in the first quarter of 2023, according to tanker tracker Vortexa Analytics.
That is up from 490,000 bpd a year earlier and down from 960,000 bpd in the fourth quarter of 2022, Vortexa estimated.
VENEZUELAN FUEL
Traders expressed worry that inspections might extend to Venezuelan crude, long used as a feedstock for road-paving bitumen with a density of 950 kg/m3, or higher, and which has been marketed into China in recent years labelled as Malaysian crude or bitumen mix with little hassle.
Vortexa estimated China's first-quarter imports of Venezuelan crude, mostly its main grade Merey, at 430,000 bpd, steady with the previous quarter but up from 300,000 bpd a year earlier.
China has not officially reported any crude imports from Venezuela since October 2019. Only a handful of Iranian oil shipments were officially recorded, often destined for state reserves, after independents took over the business in late 2019.
WHY THE MISLABELLING?
Some independent refiners do not have, or are short of, crude oil import quotas.
Cargoes labelled as diluted bitumen do not require quotas, but are subject to consumption tax of 1,218 yuan ($176) a tonne, and an import tariff of 8%. Refiners can receive partial rebates of the consumption tax after processing.
Traders said the mislabelling was encouraged by steep discounts for Iranian oil, last heard at benchmark Brent futures minus $12.5 a barrel, and recovering demand in China for gasoline, aviation fuel and bitumen.
Seaboard: pioneers in power generation in the country
…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.
More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.
An oil pump jack is seen in an oil field near Lake Maracaibo, in Cabimas, Venezuela October 14, 2022. REUTERS/Issac Urrutia/File Photo/ Editing by Germán & CoExclusive: Chevron aims to boost Venezuela oil output to accelerate debt recovery -sources
PDVSA and the Venezuelan oil ministry did not respond to requests for comment. In accordance with "all rules and regulations, as well as the sanctions framework supplied by the U.S. Office of Foreign Assets Control," Chevron stated it will continue to operate.
REUTERS By Marianna Parraga and Deisy Buitrago/ Editing by GermÁn & CoHOUSTON/CARACAS, May 10 (Reuters) - Chevron Corp's (CVX.N) renewed oil operations in Venezuela begin a new phase next month that will boost production with the goal of accelerating a plan to recover all of the $3 billion of debt owed by the OPEC member by the end of 2025, four people close to the matter said.
Washington in November issued a six-month, automatically renewing license to the U.S. oil company to revive largely dormant operations in Venezuela and resume crude exports to the U.S. under an exemption to sanctions on the South American country.
To back up its license application, Chevron last year signed an oil-for-debt swap with Venezuela's state-run PDVSA.
Under the deal, Chevron aims to recover some $750 million in unpaid debts and dividends by year-end, and all $3 billion outstanding by the end of 2025, one of the people said. So far, it has recovered some $220 million, the source said.
The plan shows both Chevron and PDVSA are getting what they wanted from the agreement: Venezuelan oil flowing to the U.S. and the OPEC nation getting royalties, worker benefits and a chance for future profits.
Chevron this year has reactivated crude output at its four joint ventures with PDVSA, exported an average 102,500 barrels per day (bpd), taken a role in procuring supplies and appointed new managers to the ventures' boards.
The initial exports have rapidly drained the ventures' oil inventories, which had built up for years. Chevron plans to continue pushing up heavy crude output mainly at oilfields in eastern and western Venezuela belonging to its Petropiar and Petroboscan projects, according to the sources.
MORE EFFICIENT OPERATIONS
In the second phase, Chevron plans to drive crude production to up to 160,000 bpd this year and about 200,000 bpd in 2024, one of the people said.
To optimize exports, the oil major has proposed to help Venezuela prepare a study on dredging Lake Maracaibo's navigation channel, which would let it load larger tankers, three of the people said.
Chevron also has asked PDVSA to assign it dedicated storage tanks for its joint ventures to improve handling of imported diluents and crude from the Orinoco Belt, Venezuela's largest producing region.
To motivate their joint venture workers, Chevron and PDVSA have agreed to pay bonuses for food and personal care to the staff, and improve their health insurance coverage, they added.
Venezuela's oil ministry and PDVSA did not reply to a request for comment. Chevron said it continues to conduct business "in compliance with all laws and regulations, as well as the sanctions framework provided by the U.S. Office of Foreign Assets Control."
More robust work and investment plans will have to wait, according to the sources.
At the Petropiar joint venture, urgent repairs are needed to its crude upgrader, which converts the Orinoco heavy crude into exportable grades. But major maintenance at the facility and a long-delayed new drilling plan are not expected in the short term, the people said.
"They will continue doing well workover only," one person said.
Chevron CEO Michael Wirth last month said the company's output in Venezuela was expected to reach 150,000 bpd this year without significant new investment and under existing license terms.
GOLDEN TICKET
Chevron's license broke a four-year U.S. prohibition on Venezuelan oil exports to the United States designed to oust President Nicolas Maduro.
Even though the license bans any cash payments to Maduro's administration, it has helped Venezuela stabilize its currency by injecting U.S. dollars into its economy and benefited U.S. Gulf Coast refiners receiving the oil.
According to the oil-for-debt swap's terms, sales proceeds since January are going to the ventures' foreign bank accounts, Reuters has learned.
From there, one portion goes to debt repayment, a second to taxes and royalties through foreign currency exchange transactions by banks in Venezuela, and a third covers operational expenses, the sources said.
Because the license automatically renews every month for six more months, Chevron has dealt with fewer policy changes compared with the system it had until 2020, which required a full renewal of terms at every license's expiration.
The license will keep renewing unless the U.S. decides to rescind it or changes its terms, sources in Washington, Houston and Caracas said.
Reporting by Marianna Parraga in Houston and Deisy Buitrago in Caracas. Additional reporting by Matt Spetalnick in Washington and Sabrina Valle in Houston Editing by Marguerita Choy
Image: Germán & CoCooperate with objective and ethical thinking…
Ukrainian soldiers near Maryinka, a city in the eastern region of Donetsk, where fierce battles against Russian forces have been taking place. Photograph: LIBKOS/AP/Editing by Germán & CoThe west must be ready for this moment of opportunity and risk in Ukraine
Ukrainians are preparing for a make-or-break counteroffensive. They have a theory of victory. Do we?
The Guardian by Timothy Garton Ash, Wed 10 May 2023 As you read this, thousands of young Ukrainian men and women are going through their last training drills, checking their weapons and waiting for D-day. In the big Ukrainian counteroffensive that may start any time now, some of them will be killed and many more will be wounded. None will emerge unchanged. We thought we had said goodbye to all that in 1945, but this is Europe in 2023.
Nobody knows what will happen in this campaign. Nobody. But we can at least be clear what we want to happen – and firm in supporting the Ukrainians to achieve it. Decisive Ukrainian victory is now the only sure path to a lasting peace, a free Europe and ultimately a better Russia. This alone would be the new VE Day.
Ukrainians have a theory of victory. It goes from success on the battlefield to change in Moscow. For preference, that would be a change of regime, getting rid of the war criminal in the Kremlin. But in the highly unlikely event that Vladimir Putin were to acknowledge his own failure and withdraw his troops, while still remaining in power, that would be victory too.
US and UK tell Russia to stop using hunger as leverage in Ukraine conflict – as it happened
How do they think this might happen, given Russia’s dug-in defending forces and major advantages in numbers and air power? One answer is: the way it happened before in Russian history, with military setbacks triggering the revolutions of 1905 and 1917. If the Ukrainian army can push rapidly south to the Sea of Azov, encircle a large number of demoralised Russian forces and cut the supply lines to the Crimean peninsula, there might be some non-linear collapse of Russian military morale on the ground and regime cohesion in Moscow.
Crimea is the key to this scenario. Ukrainians want to head for the peninsula (but not immediately try to occupy it) for precisely the reason that many western policymakers wish them not to: because Crimea is the thing that really matters to Russia. They add that Ukraine can never have long-term security while Crimea is a giant Russian aircraft carrier pointed at its heart.
It’s a bold and risky theory of victory, but does anyone in the west have a better one? Many western policymakers seem almost as afraid of Ukrainian success as they are of Ukrainian failure, fearing that Putin will escalate in response. So, they nourish a confused idea that there’s a Goldilocks outcome – not too hot, not too cold – that will open the way to the nirvana of a “negotiated solution”. Or, more cynically (self-styled “realistically”), they are privately prepared for Ukraine to end up losing perhaps one-sixth of its sovereign territory, in a partition that they can call “peace”. But at best this would be a semi-frozen conflict, pending renewed war. Here we encounter, once again, the unrealism of “realism”.
Most Western military analysts think that Ukraine is unlikely to achieve a decisive victory, thus making moot the question of whether this would trigger the hoped-for political consequences in Moscow. If you have two exhausted armies, that favours defence over offence. Ukraine has great vulnerabilities in its air defences. The fact that there’s only one obvious path towards Crimea means that Russia is prepared to defend that line. (So it’s possible Ukraine might try something else, but even taking back a substantial chunk of Donbas would not have the same psychological effect in Russia as a threat to Crimea.)
The counteroffensive can deploy nine new western-equipped and trained brigades, but these have a mix-and-match zoo of different western weapons and scant experience in the complex combined arms operations needed to overcome Russia’s defensive lines. Because capitals such as Washington and Berlin have been nervously pondering every item, the Ukrainians don’t have the quantity and quality of western tanks, armoured vehicles, long-range missiles and fighter planes they might have had if the west had not held back for fear of escalation.
The next six months will be decisive. If, come next winter, Ukrainian forces are still bogged down halfway, the west may not deliver a comparable military boost for another offensive next spring. Beside objective difficulties in gearing up our defence industries, there might be waning political support, especially in the US in the run-up to next autumn’s presidential election. There would then be disillusionment in Ukraine. Putin would still be in power. He could use his propaganda apparatus at home to sell his partial occupation of Ukrainian territory as a historical restoration of Catherine the Great’s empire.
The alternative, perhaps unlikely but still possible, is a decisive Ukrainian victory. Since that would mean a defeat that even Putin’s state lie-machine could not conceal, the path to victory would bring a moment of increased risk. Although nobody knows exactly what’s going on inside the Kremlin black box, intelligence-based analysis suggests that Putin has wargamed and rejected the option of using tactical nuclear weapons, as this would bring no clear military advantage and alienate China and India. But the situation around the Zaporizhzhia nuclear-power plant, which was seized by Russia in February 2022 and around which the occupiers have now evacuated the local population, is extremely worrying. He also has other possible asymmetric responses, such as a cyber-attack or targeting a gas pipeline.
Understanding Vladimir Putin, the man who fooled the world
What should we do about this? Don’t be scared, be prepared. There is no risk-free way forward. Avoiding an immediate risk can mean creating larger risks down the road (which is the mistake the west made after 2014 when it allowed Russia to keep Crimea and negotiated the sticking plaster Minsk Agreement for occupied eastern Ukriane). These risks include not only recurrent armed conflict in Ukraine but also encouraging China to have a go at Taiwan. I’ve lost count of the number of times Ukrainians have said to me that the west’s biggest problem is fear. “The choice is between freedom and fear,” President Volodymyr Zelenskiy recently told the Atlantic. So we have to keep our nerve and show just a little of the fortitude that those thousands of young Ukrainians are demonstrating, as they prepare to risk their lives to defend their freedom.
I’m acutely aware of the need to avoid any hint of armchair heroism. Even if I travel to Ukraine occasionally during this war, I’m not taking a small fraction of the personal risk that Ukrainians face. Responsible governments must recognise, anticipate and carefully weigh the real dangers of escalation. Prudence is not cowardice. But there’s also another thing to avoid: the woolly talk of “peace” and “responsibility”, which actually means urging, or ultimately even compelling, other people to sacrifice their own homes, freedom and security, so that citizens of countries such as Germany, France or Italy can, if only in the short term, go on enjoying these things for themselves.
The west has done that many times before to people in central and eastern Europe. Let’s not do it again.
Timothy Garton Ash is a historian, political writer and Guardian columnist