Chevron has announced a significant investment of over $7 billion US in its joint ventures in Venezuela to boost oil production to approximately 600,000 barrels per day within the next five years. The expansion will take place in the Carabobo region of Venezuela’s Orinoco Belt. Chevron’s CEO, Mike Wirth, expressed confidence in Venezuela’s abundant resources and its potential for long-term investment.
This move by Chevron comes shortly after U.S. President Donald Trump revealed a groundbreaking deal involving a substantial portion of Venezuela’s oil reserves, where the U.S. government secured an equity stake in a private oil company operating in the country. Although separate from this deal, Chevron’s expansion aligns with Trump’s efforts to increase oil output in Venezuela, with expectations for oil reaching U.S. reserves by November.
Venezuela possesses the world’s largest oil reserves, yet its current daily output stands at around 1.25 million barrels, a sharp decline from over three million barrels two decades ago due to mismanagement and underinvestment by the state-run oil firm, PDVSA. The country aims to boost its total oil production to two million barrels per day by the end of the decade, as stated by U.S. Energy Secretary Chris Wright.
Chevron’s new agreements offer favorable fiscal, commercial, and legal terms to safeguard long-term investments, with projected production costs below $20 per barrel. The company’s existing infrastructure is well-maintained, and the development in new areas will leverage the current facilities and pipeline networks. Wirth, along with other Chevron executives, recently met with interim Venezuelan President Delcy Rodriguez for discussions on the expansion plans.
In addition to Chevron, companies like ENI, KEO Capital, and Primavera are expected to sign energy agreements in Venezuela, emphasizing project expansions that were part of a broader oil reform approved in January. U.S. Energy Secretary Chris Wright and Venezuela’s oil minister, Paula Henao, are set to oversee the contract signings.
Since the capture and ousting of former Venezuelan President Nicolás Maduro, Trump has advocated for a $100-billion US reconstruction plan for Venezuela’s energy sector, urging U.S. oil companies to invest in the country. While Chevron has maintained its presence in Venezuela for a century, other oil producers like ExxonMobil and ConocoPhillips exited the country in 2007 following nationalization of their assets under the previous government of Hugo Chávez.
Chevron’s long-standing operations in Venezuela date back to 1923, with joint ventures in the Orinoco Belt and Zulia state. Amid its expansion, the partnership with North American Blue Energy Partners to develop 17 oilfields holding significant crude reserves is poised to create a formidable entity in the oil industry, signaling a shift in the sector’s dynamics.
