Chevron has announced a significant investment of over $7 billion in its Venezuela joint ventures to boost oil production to around 600,000 barrels per day over the next five years in the South American nation. The expansion will take place in the Carabobo region within Venezuela’s Orinoco Belt. Chevron’s CEO, Mike Wirth, expressed the company’s long-standing confidence in Venezuela’s abundant resources and its competitiveness for long-term investments.
This move by Chevron comes shortly after U.S. President Donald Trump revealed a groundbreaking 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. Chevron’s expansion is unrelated to this development but aligns with Trump’s strategy to bolster oil production in Venezuela.
Venezuela, known for having the world’s largest oil reserves, has seen its oil output drop to approximately 1.25 million barrels per day due to years of mismanagement and underinvestment by the state-run oil firm PDVSA. The country aims to increase its total oil production to two million barrels per day by the end of the decade, as per U.S. Energy Secretary Chris Wright.
Chevron’s new agreements offer favorable fiscal, commercial, and legal terms to safeguard its long-term investments, with expected production costs below $20 per barrel. The company plans to leverage existing infrastructure and facilities for development in the additional areas. Wirth, along with other Chevron executives, held discussions with interim Venezuelan President Delcy Rodriguez during their visit to the country.
In a push for energy investment, the U.S. administration, following the removal of former Venezuelan President Nicolás Maduro, has proposed a $100-billion reconstruction plan for Venezuela’s energy sector, urging American oil companies to engage in the country’s energy projects. While Chevron has maintained its operations in Venezuela for over a century, other oil majors like ExxonMobil and ConocoPhillips exited the market in 2007 following nationalization of their assets under the previous administration.
Chevron’s presence in Venezuela dates back to 1923, with existing joint ventures in the Orinoco Belt and western Zulia state. As Chevron expands its operations in the country, the U.S.’s involvement in North American Blue Energy Partners’ oilfields development project could result in the emergence of a significant player in the global oil industry, as noted by Oswaldo Felizzola, an energy expert in Venezuela.