Chevron has announced plans to invest over $7 billion in its Venezuela joint ventures to boost oil production to approximately 600,000 barrels per day within the next five years. This move aims to double the current output in the South American country. The expansion will involve Chevron’s Petroindependencia joint venture expanding into two adjacent areas in the Carabobo region situated in Venezuela’s Orinoco Belt.
Chevron’s CEO, Mike Wirth, expressed confidence in Venezuela’s resource potential and its competitiveness for long-term investment opportunities. This announcement follows U.S. President Donald Trump’s recent unveiling of a significant deal involving a portion of Venezuela’s oil reserves, where the U.S. government acquired an equity stake in a private oil company operating in the region. Although separate from this initiative, Chevron’s expansion aligns with the broader efforts to increase oil production in Venezuela.
Venezuela possesses the world’s largest oil reserves, but its current output stands at around 1.25 million barrels per day, a substantial decline from over three million barrels per day two decades ago due to mismanagement and underinvestment by the state-run oil firm, PDVSA. The country aims to reach a total oil output of two million barrels per day by the end of this decade, according to U.S. Energy Secretary Chris Wright.
Chevron’s new agreements offer improved fiscal, commercial, and legal terms to safeguard long-term investments, with total production costs anticipated to be below $20 per barrel. The joint venture will leverage existing infrastructure and facilities in the expansion areas, ensuring operational efficiency and cost-effectiveness.
In addition to Chevron’s endeavors, other key players like ENI, KEO Capital, and Primavera are set to sign energy agreements in Venezuela. These agreements signify a shift in the energy sector, aligning with the comprehensive oil reform approved earlier in the year. U.S. Energy Secretary Chris Wright and Venezuela’s oil minister, Paula Henao, are overseeing the signing of these contracts.
Following the U.S. administration’s push for energy investment in Venezuela, Chevron’s commitment underscores its longstanding presence in the country. While Chevron remains steadfast in its operations, other oil majors like ExxonMobil and ConocoPhillips exited Venezuela in 2007 following nationalization under the previous government. The U.S. government’s strategic involvement in Venezuela’s energy sector is reshaping the landscape, with significant developments underway that could redefine the industry dynamics.