Chevron has announced plans to invest over $7 billion in its Venezuelan joint ventures to boost oil production to around 600,000 barrels per day within the next five years. The expansion will involve Chevron’s Petroindependencia joint venture, which will extend to include two additional areas in the Carabobo region of Venezuela’s Orinoco Belt. Chevron’s CEO, Mike Wirth, expressed confidence in Venezuela’s resource potential and its attractiveness for long-term investments.
This move by Chevron comes shortly after U.S. President Donald Trump revealed a significant deal involving a portion of Venezuela’s oil reserves, with the U.S. government acquiring an equity stake in a private oil company operating in the country. While separate from this agreement, Chevron’s expansion aligns with Trump’s efforts to increase oil production in Venezuela.
Venezuela possesses the world’s largest oil reserves, yet its current output stands at only about 1.25 million barrels per day, a significant decline from over three million barrels per day twenty years ago due to mismanagement and underinvestment by the state-owned firm PDVSA. The country aims to reach a total oil output of two million barrels per day by the end of the decade, according to 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 existing infrastructure of the joint venture is well-maintained, and the development in the new areas will leverage the current facilities and pipeline networks, as highlighted by Wirth in an interview with CNBC.
Top executives from Chevron, including Wirth, held discussions with interim Venezuelan President Delcy Rodriguez, emphasizing the company’s commitment to growth in the region. Additionally, other entities like ENI, KEO Capital, and Primavera are poised to sign energy agreements in Venezuela, focusing on project expansions under the new terms brought about by a recent oil reform.
Following the removal of former Venezuelan President Nicolás Maduro 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 has a longstanding presence in Venezuela, other major players like ExxonMobil and ConocoPhillips exited the market in 2007 when their assets were nationalized under the previous government.
Chevron has been operating in Venezuela since 1923, with joint ventures in the Orinoco Belt and western Zulia state. As Chevron expands its operations, the U.S. involvement in North American Blue Energy Partners’ initiative to develop significant oilfields could reshape the industry landscape, according to experts in Venezuela.