Chevron and four oil services companies won U.S. government approval to continue producing oil in Venezuela despite sanctions placed on the crisis-stricken country.

(Bloomberg) -- Chevron Corp. and four oil services companies won U.S. government approval to continue producing oil in Venezuela despite sanctions placed on the crisis-stricken country.

The extension of a waiver from sanctions will keep San Ramon, California-based Chevron’s joint venture with state-owned Petroleos de Venezuela SA running for another three months, the U.S. Treasury Department’s Office of Foreign Assets Control said in a statement Friday. The waiver, previously due to end on July 27, will now last until Oct. 25.

Oilfield service companies Schlumberger Ltd., Halliburton Co., Baker Hughes and Weatherford International Plc were also allowed to continue their work in Venezuela for three months.

While Venezuela only accounted for 1% of Chevron’s global crude production last year, it remains strategically important. The company is the only major U.S. producer still operating in the country, which has the world’s largest oil reserves. In recent months, Chevron made the case to the Trump administration that if it were to leave, its Venezuelan assets could be turned over to another operator. That could mean the state, or even Russian or Chinese interests.

The U.S. has refused to recognize Nicolas Maduro as Venezuela’s president after an election last year. Financial sanctions have become its main tool for depriving Maduro of cash and pressuring the military to turn against him.

Earlier this week, Venezuela’s opposition-led National Assembly issued a decree that guaranteed Chevron’s assets in the country would be protected under a new government led by Juan Guaido.

Oil purchases from Venezuela have become complicated since the U.S. expanded its sanctions regime to include any business done with PDVSA, as the national oil company is also known. Other companies, including Spain’s Repsol SA and Italy’s Eni SpA, continue to do business with Venezuela.

Chevron has operated in Venezuela for almost a century, since the discovery of the Boscan field in the 1920s. It has outlasted Exxon Mobil Corp., which left the country after a series of industry nationalizations during Hugo Chavez’s tenure as president.

Venezuela has seen its oil output drop precipitously in recent years. Production is currently below 800,000 barrels a day, down from as much as 3.45 million in 1998. Chevron got about 40,000 barrels a day from its Venezuelan affiliate in 2018.

--With assistance from Catherine Traywick.

To contact the reporter on this story:

Kevin Crowley in Houston at kcrowley1@bloomberg.net

To contact the editors responsible for this story:

Simon Casey at scasey4@bloomberg.net

Tina Davis, Carlos Caminada