Chevron is set to inject over $7 billion into its joint ventures in Venezuela to ramp up oil production to approximately 600,000 barrels per day over the next five years, as announced by the American oil giant on Wednesday. The expansion will see Chevron’s Petroindependencia joint venture encompass two additional areas in the Carabobo region of Venezuela’s extensive Orinoco Belt.
Chevron’s CEO, Mike Wirth, expressed the company’s enduring confidence in Venezuela’s substantial resource potential and its attractiveness for long-term investments. This move follows shortly after President Donald Trump unveiled a significant agreement involving a substantial portion of Venezuela’s oil reserves, with the U.S. government acquiring an equity stake in a private oil company operating in the region. Although separate from this arrangement, Chevron’s expansion aligns with Trump’s initiatives to boost oil output in Venezuela.
The anticipated oil production from these agreements may impact U.S. reserves by November, according to White House spokesperson Anna Kelly. Venezuela, home to the world’s largest oil reserves, presently produces around 1.25 million barrels per day, a sharp decline from its peak of over three million barrels per day two decades ago due to mismanagement and underinvestment by the state-run oil firm PDVSA.
Chevron highlighted that the new agreements offer favorable fiscal, commercial, and legal conditions to safeguard long-term investments, with projected production costs below $20 per barrel. The existing infrastructure of the joint venture is well-maintained, and the development in the new areas will leverage the current facilities and pipeline network, as mentioned by Wirth in a CNBC interview.
During their visit to Venezuela, Wirth and other Chevron executives engaged with interim Venezuelan President Delcy Rodriguez. Notably, this marked Wirth’s inaugural visit to the country. Apart from Chevron, other key players like ENI, KEO Capital, and Primavera, a firm co-founded by billionaire Fred Ehrsam, are poised to finalize energy agreements in Venezuela soon. These agreements are part of the broader transition of numerous energy contracts to new terms under a comprehensive oil reform approved in January.
Following the events earlier this year, where the U.S. facilitated the removal of former Venezuelan president Nicolás Maduro, Trump advocated for a substantial reconstruction plan worth $100 billion for Venezuela’s energy sector, encouraging American oil companies to invest in the nation. While Chevron has maintained its operations in Venezuela for over a century, fellow oil majors ExxonMobil and ConocoPhillips exited the country in 2007 after their assets were nationalized under the previous administration.
Chevron’s enduring presence in Venezuela dates back to 1923, with three joint ventures currently active in the country. Petroindependencia and Petropiar operate in the Orinoco Belt, while Petroboscan functions in the western Zulia state. The expansion of Chevron’s operations, along with the U.S. involvement in North American Blue Energy Partners’ ambitious plan to develop oilfields holding massive crude reserves, indicates a transformative shift in the energy landscape, according to industry experts.