Chevron is set to inject over $7 billion into its joint ventures in Venezuela to amplify oil production to approximately 600,000 barrels per day within the next five years, as disclosed by the prominent U.S. oil company on Wednesday. The expansion of Chevron’s Petroindependencia joint venture will encompass two neighboring areas in the Carabobo region situated in Venezuela’s extensive Orinoco Belt.
“Chevron’s enduring presence in Venezuela, spanning over a century, underscores our confidence in the nation’s abundant resource potential and its attractiveness for long-term investments within our portfolio,” stated Chevron CEO Mike Wirth. This development follows closely after U.S. President Donald Trump’s unveiling of an extraordinary agreement involving a fifth of Venezuela’s oil reserves, with the U.S. government securing an equity stake in a private oil entity operating in the region. Although separate from this initiative, Chevron’s expansion aligns with Trump’s initiatives to bolster oil output in Venezuela.
According to White House spokesperson Anna Kelly, oil stemming from the deal could start flowing into U.S. reserves by November. Venezuela boasts the world’s largest oil reserves, yet its current production stands at only about 1.25 million barrels per day, a stark decline from over three million barrels per day achieved two decades ago due to years of mismanagement and underinvestment by the state-run oil company PDVSA.
Chevron’s fresh agreements offer improved fiscal, commercial, and legal terms to safeguard long-term investments, with total production costs anticipated to be below $20 per barrel. The existing infrastructure of the joint venture is in good condition, and the development in the new areas will leverage existing facilities and pipeline infrastructure, as highlighted by Wirth in a CNBC interview. Wirth, along with other Chevron executives, held discussions with interim Venezuelan President Delcy Rodriguez during their visit, marking Wirth’s inaugural trip to the country.
Apart from Chevron, other entities such as oil producer ENI, investor KEO Capital, and energy firm Primavera, among others, are on track to finalize energy agreements in Venezuela imminently, according to sources familiar with the negotiations. These agreements are part of the migration of numerous energy contracts to new terms following a comprehensive oil reform greenlit in January.
Following the removal of former Venezuelan President Nicolás Maduro from office earlier this year, Trump advocated for a $100 billion reconstruction plan for Venezuela’s energy sector, encouraging U.S. oil companies to invest in the country. While Chevron’s operations in Venezuela have been unceasing for a century, fellow oil giants ExxonMobil and ConocoPhillips exited the country in 2007 when their assets were nationalized under the previous government of President Hugo Chávez.
Chevron’s presence in Venezuela dates back to 1923, with three joint ventures operating in the country. As Chevron bolsters its stronghold in Venezuela, the U.S. stake in oil firm North American Blue Energy Partners’ scheme to develop 17 oilfields containing approximately 64 billion barrels of crude reserves is poised to create a significant player in the industry, according to Oswaldo Felizzola from the energy center at the Superior Administrative Studies Institute in Venezuela. Felizzola emphasized the evolving landscape, noting the emergence of a major U.S. oil entity through the NABEP deal.