The owner of Continental Resources and one of the faces of the shale revolution Harold Hamm has criticized the Biden administration’s decision to grant sanction relief to Chevron so it can restart its operations in Venezuela.
Calling the deal a sign of desperation, per a Financial Times report, Hamm then went on to blame the administration for killing the U.S. oil industry.
“This Venezuelan deal, that’s a good example of the desperation that this administration is dealing with,” Hamm said, referring to the administration’s attempts to rein in inflation at the pump.
“They know what they did. They know they took the federal lands off the table,” Continental Resources’ CEO told the FT in an interview. “They know better and shame on them… They want to put oil and gas out of business.”
Last week, the U.S. Treasury issued a license authorizing Chevron to resume limited natural resource extraction operations in Venezuela while preventing Venezuela’s state oil firm PDVSA from receiving profits from the oil sales by Chevron. The license authorizes Chevron to produce oil at fields jointly operated with PDVSA and sell the oil to U.S. refiners.
Under the limited authorization, profits from the sale of oil and petroleum products would go to paying down debt to Chevron and not boosting state-run PDVSA’s profits.
The license is valid for six months and is not expected to contribute to any noticeable increase in Venezuelan oil output. According to Chevron, first oil under the new deal may flow by the end of the year.
According to Hamm, however, this oil would not help U.S. fuel security: for that, the U.S. needs more local, shale oil.
“You have to understand where diesel comes from, and you can’t make it out of tar,” he told the FT, referring to heavy Venezuelan oil as opposed to shale oil which is much lighter and sweeter.
By Irina Slav for Oilprice.com
