Chevron has announced plans to invest over $7 billion in its joint ventures in Venezuela to ramp up oil production to around 600,000 barrels per day within the next five years. The U.S. oil giant stated that its Petroindependencia joint venture will be expanding to encompass two additional areas in the Carabobo region situated in Venezuela’s expansive Orinoco Belt.
“Chevron’s longstanding presence in Venezuela, spanning more than a century, showcases our confidence in the nation’s abundant resource potential and its attractiveness for investment in our portfolio for years to come,” remarked Chevron CEO Mike Wirth in a statement.
The expansion initiative by Chevron comes shortly after U.S. President Donald Trump revealed a significant deal 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. While separate from this arrangement, Chevron’s expansion aligns with Trump’s efforts to bolster oil production in Venezuela.
According to White House spokesperson Anna Kelly, oil extracted from the deal could reach U.S. reserves by November. Venezuela possesses the world’s largest oil reserves, yet its current output stands at around 1.25 million barrels per day, a considerable decline from the over three million barrels per day achieved two decades ago due to mismanagement and underinvestment by state-run oil firm PDVSA.
Chevron’s new agreements offer improved fiscal, commercial, and legal terms to safeguard long-term investments, with anticipated total production costs of less than $20 per barrel. The joint venture’s existing infrastructure is well-maintained, and the development in the new areas will leverage the current facilities and pipeline infrastructure, as highlighted by Wirth in a CNBC interview.
Wirth, alongside other Chevron executives, held discussions with interim Venezuelan President Delcy Rodriguez during their recent visit, marking Wirth’s first visit to the country.
In a push for energy investment, following the removal of former Venezuelan President Nicolás Maduro earlier this year, Trump advocated a $100-billion reconstruction plan for Venezuela’s energy sector, encouraging U.S. oil companies to invest in the country. While Chevron has maintained operations in Venezuela for over a century, other oil producers like ExxonMobil and ConocoPhillips exited the nation in 2007 after their assets were nationalized, remaining inactive since then.
Chevron, with a presence in Venezuela since 1923, operates three joint ventures in the country, with Petroindependencia and Petropiar in the Orinoco Belt, and Petroboscan in western Zulia state. Additionally, oil producer ENI, investor KEO Capital, and energy firm Primavera are among the companies poised to sign energy agreements in Venezuela, emphasizing project expansions under revised terms as part of a comprehensive oil reform approved earlier this year.
The evolving landscape in Venezuela’s oil industry, particularly with the involvement of U.S. players, is reshaping the sector, with significant developments expected in the near future.