Chevron has announced a significant investment exceeding $7 billion US in its joint ventures in Venezuela to ramp up oil production to approximately 600,000 barrels per day within the next five years. The U.S. oil giant stated that its Petroindependencia joint venture will be expanding to encompass two neighboring areas in the Carabobo region within Venezuela’s extensive Orinoco Belt.
Chevron’s CEO, Mike Wirth, emphasized the company’s longstanding presence in Venezuela, spanning over a century, and expressed confidence in the country’s abundant resources and its appeal for long-term investments. This move comes shortly after President Donald Trump revealed an unprecedented agreement involving a substantial portion of Venezuela’s oil reserves, reinforcing the administration’s efforts to boost oil output in the region.
Venezuela, possessing the world’s largest oil reserves, has been facing challenges with its current production standing at around 1.25 million barrels per day, a significant decline from its peak two decades ago due to 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 stated by U.S. Energy Secretary Chris Wright.
Chevron’s new agreements assure improved fiscal, commercial, and legal terms to safeguard its long-term investments, with projected production costs below $20 US per barrel. The company plans to leverage its existing infrastructure and facilities for development in the new areas, as highlighted by Wirth in a recent CNBC interview.
In addition to Chevron, other key players such as ENI, KEO Capital, and Primavera are set to finalize energy agreements in Venezuela, aligning with the energy contract transitions under an extensive oil reform enacted earlier this year. As part of these developments, Wright and Venezuela’s oil minister, Paula Henao, are expected to oversee the signing of these contracts.
Following the removal of former President Nicolás Maduro earlier this year, Trump has advocated a substantial reconstruction plan exceeding $100 billion US for Venezuela’s energy sector, urging U.S. oil companies to invest in the country. While Chevron continues its operations in Venezuela, other major oil producers like ExxonMobil and ConocoPhillips exited the country in 2007 following nationalization of their assets under the previous government.
Chevron’s enduring presence in Venezuela, dating back to 1923, underscores its commitment to the region. Despite its ongoing expansion efforts, the emergence of a massive U.S. oil company through the North American Blue Energy Partners’ project to develop extensive oilfields in Venezuela is reshaping the industry landscape, according to experts.