TLDR
- Chevron commits over $7 billion to Venezuelan operations across the next five-year period
- Investment aims to double crude oil production capacity to approximately 600,000 barrels daily
- Expanded Petroindependencia joint venture will cover two additional Orinoco Belt areas
- Per-barrel production costs projected to remain under $20
- Current year has already seen 15% output increase across Chevron’s Venezuelan operations
Energy giant Chevron announced Wednesday it has finalized revised agreements with Venezuela regarding its joint ventures operating in the country, pledging over $7 billion in capital investment throughout the next five years. The company’s shares gained 0.42% following the news.
The investment strategy aims to elevate Venezuela’s crude oil production to approximately 600,000 barrels daily—effectively doubling existing output levels. Production expenses are projected to stay under $20 per barrel.
Under the revised agreements, Chevron’s Petroindependencia joint venture will expand operations into two neighboring sections within Venezuela’s Orinoco Belt Carabobo region. The energy company currently manages three joint ventures across Venezuela: Petroindependencia and Petropiar located in the Orinoco Belt, plus Petroboscan situated in Zulia’s western state.
CEO Mike Wirth emphasized the expansion demonstrates strong confidence in Venezuela’s resource capabilities. “Chevron’s history in Venezuela spans more than a century, and our expanded position reflects our confidence in the country’s deep resource potential and its ability to compete for investment within our portfolio for decades,” Wirth stated.
Since establishing operations in Venezuela in 1923, Chevron remains among the rare U.S. energy majors maintaining uninterrupted presence in the nation. Both ExxonMobil and ConocoPhillips departed in 2007 after asset nationalization under Hugo Chavez and have yet to resume operations.
Context Behind the Deal
This announcement follows President Trump’s recent deal granting the United States majority control over approximately 65 billion barrels of Venezuelan oil reserves. While Chevron’s expansion operates independently from that agreement, it aligns with broader initiatives to revitalize Venezuela’s petroleum industry.
Despite possessing the planet’s largest proven oil reserves, Venezuela currently produces merely about 1.25 million barrels daily. This represents a dramatic decline from the 3 million barrels per day produced two decades earlier, resulting from years of poor management by state-controlled PDVSA.
U.S. Energy Secretary Chris Wright, arriving in Caracas late Tuesday evening, anticipates Venezuela’s aggregate oil production will hit 2 million barrels daily before the decade concludes. Wright alongside Venezuela’s oil minister Paula Henao will oversee the execution of numerous energy contracts.
Wirth emphasized that necessary infrastructure for the expansion already exists. “Our ability to grow at low cost is quite different than if we were going into a greenfield area that didn’t have roads, that didn’t have water, that didn’t have power,” he explained to CNBC.
Other Companies Moving In
Chevron isn’t alone in pursuing Venezuelan opportunities. Energy producer ENI, investment firm KEO Capital, and energy company Primavera, co-established by billionaire Fred Ehrsam, are among entities anticipated to finalize energy contracts in Venezuela as early as Wednesday.
Many of these agreements involve project expansions negotiated following comprehensive oil sector reforms enacted in January, after former President Nicolas Maduro’s removal from power.
Chevron confirmed the updated agreements feature improved fiscal, commercial and legal provisions designed to safeguard long-term capital investments. Throughout its three Venezuelan joint ventures, the company has already achieved a 15% production increase during the current year.
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