Chevron Retail Gas Station. Chevron traces its roots to the Standard Oil Corporation IV

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The Biden administration confirmed Saturday it would ease some oil sanctions on Venezuela, including granting Chevron (NYSE:CVX) a license to resume “limited” oil production in the country after U.S. sanctions stopped all drilling activities there three years ago.

The reprieve came after Venezuelan President Maduro’s government and a coalition of political opponents agreed to implement a humanitarian relief program and continue talks in Mexico City on holding free and fair elections.

Chevron (CVX) was awarded a six-month license from the U.S. Treasury Department that authorizes it to produce crude oil and petroleum products in its projects in Venezuela, which are operated jointly with state-run oil company PDVSA.

No new drilling is authorized, but Chevron (CVX) will be able to repair and perform maintenance of oil fields, and it will be allowed to resume crude oil exports from the country.

PDVSA will not receive profits from the sale of oil, as proceeds will go toward repayment of old debt to Chevron (CVX).

Before the U.S. ordered a complete halt of drilling operations in 2020, Chevron’s (CVX) share of Venezuelan crude oil production was 15K bbl/day.

The decision also allows for U.S. oil service providers Halliburton (HAL), Schlumberger (SLB), Baker Hughes (BKR) and Weatherford International (WFRD) to restart work in Venezuela.

Chevron (CVX) shares have become expensive, “trading at a valuation where it needs high double-digit long-term prices, something that history shows is unlikely,” The Value Portfolio writes in an analysis posted recently on Seeking Alpha.

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