Chevron plans to inject over $7 billion into its joint ventures in Venezuela, aiming to increase oil production to approximately 600,000 barrels per day within the next five years, as stated by the U.S. oil giant on Wednesday.
As part of new agreements, Chevron’s Petroindependencia joint venture will grow to encompass two neighboring areas in the Carabobo region, situated in Venezuela’s extensive Orinoco Belt.
“Chevron has been part of Venezuela for over a century, and our expanded presence demonstrates our belief in the country’s immense resource potential and its capability to attract investment in our portfolio for many years to come,” said Chevron CEO Mike Wirth in a statement.
This announcement follows closely on the heels of U.S. President Donald Trump’s revelation of a groundbreaking deal concerning a fifth of Venezuela’s oil reserves, which includes the U.S. government taking an equity position in a private oil company operating in the region. While Chevron’s expansion is distinct from this initiative, it reinforces Trump’s objective to boost oil output in Venezuela.
Oil from this deal could reach U.S. reserves as early as November, according to White House spokesperson Anna Kelly, who spoke to Fox News’s America Reports on Wednesday.
World’s largest reserves
Venezuela holds the largest oil reserves globally, yet its current production stands at roughly 1.25 million barrels per day (bpd), a significant decline from over three million bpd achieved two decades ago due to years of mismanagement and inadequate investment by the state-run oil entity PDVSA.
According to U.S. Energy Secretary Chris Wright, Venezuela’s total oil production is projected to reach two million bpd by the end of this decade.
U.S. Energy Secretary Chris Wright arrives at Miraflores Palace to oversee the signing of an agreement between Chevron and government officials to expand the company’s operations, in Caracas, Venezuela, on Sept. 2. (Leonardo Fernandez Viloria/Reuters)
Chevron noted that its new agreements also offer improved fiscal, commercial, and legal conditions to safeguard long-term investments, with total production costs anticipated to be under $20 per barrel.
The infrastructure of the joint venture is in solid condition, and development in the new areas will leverage existing facilities and pipeline systems, Wirth explained in a CNBC interview.
On Wednesday, Wirth and other Chevron executives engaged with interim Venezuelan President Delcy Rodriguez, marking Wirth’s inaugural visit to the nation.
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“Our capacity to expand at a low cost is significantly different than if we were entering a greenfield area lacking infrastructure,” he stated on CNBC.
In addition to Chevron, other companies such as oil producer ENI, investor KEO Capital, and energy firm Primavera—co-founded by billionaire Fred Ehrsam to invest in Venezuela—are expected to finalize energy agreements in Venezuela as early as Wednesday, according to two sources familiar with the preparations. Most agreements are expected to involve project expansions that have been under negotiation as part of the transition of numerous energy contracts to new terms following a comprehensive oil reform approved in January.
Wright, who reached Caracas late on Tuesday, along with Venezuela’s oil minister, Paula Henao, is anticipated to oversee the contract signings, as officials have indicated.
U.S. pushes energy investment
After the U.S. successfully removed former Venezuelan president Nicolás Maduro from office in January, Trump advocated for a $100-billion reconstruction initiative for Venezuela’s energy sector, encouraging U.S. oil companies to invest in the nation.
While Chevron has continued its operations in Venezuela uninterrupted for over a century, competitors ExxonMobil and ConocoPhillips exited the country in 2007 when their assets were nationalized under the former administration of president Hugo Chávez and have remained absent since then.
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Chevron has been active in Venezuela since 1923, managing three joint ventures in the country. Petroindependencia and Petropiar function within the Orinoco Belt, whereas Petroboscan operates in the western Zulia state.
As Chevron solidifies its presence in the nation, the U.S. stake in North American Blue Energy Partners, which plans to develop 17 oilfields containing approximately 64 billion barrels of crude reserves, is anticipated to create a new giant in the industry, according to Oswaldo Felizzola, coordinator of the energy center at the Superior Administrative Studies Institute in Venezuela.
“It’s essential to recognize that the rules are evolving—an enormous U.S. oil corporation is poised to emerge from the NABEP deal,” he remarked.