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Sources say that Chevron and Valero are in discussions to reactivate the supply agreement for Venezuelan oil to US.

Three sources familiar with the preparations told reporters on Tuesday that Chevron Energy and Valero Energy were working to resume the supply of Venezuelan crude oil to Valero’s U.S. refining facilities under an agreement which was paused. This follows a newly granted license to the U.S. energy major.

Washington issued a new limited authorization to Chevron in late July, allowing it to trade oil with Venezuela and export crude. This was a shift in policy following the prisoner exchange. Last week, the U.S. oil producer said that it expects to resume oil deliveries this month.

While Chevron awaits the Venezuelan state-owned company PDVSA's allocation of cargoes to be delivered in August, Chevron, Valero and others are working out details of their agreement. This includes resuming ship-to-ship operations off Aruba, an island in the Caribbean.

One source said that Valero could resume its cargo transfer from Aruba as early as this month following inspections required by law and negotiations on vessel contracts.

Chevron and Valero didn't immediately respond to comments.

According to shipping data, Chevron shipped from Aruba around 50,000 barrels of Venezuelan heavy oil per day to Valero refineries in the first quarter before its license to operate was revoked.

Data showed that the volume was about 20% of Chevron’s total Venezuelan oil exports during this period.

The deal is crucial for Petroboscan, Chevron’s second-largest joint venture in Venezuela. This project produces heavy Boscan crude, and storage limitations have previously forced production cuts. (Reporting Marianna Pararaga and Arathy Sommesekhar; additional reporting by Sheila Dang; editing by Deepa Babbington)

(source: Reuters)