Chevron, the second-largest US oil company, has committed to a $7 billion expansion of its operations in Venezuela. This investment aims to more than double its current output, reaching approximately 600,000 barrels per day within five years. This significant move comes shortly after US Energy Secretary Chris Wright arrived in Caracas to unveil new investments in the country's energy sector. The expansion will involve developing two new oil fields in Venezuela's Orinoco Belt, near existing operations.
The deal stems from a joint venture between Chevron and Petroindependencia, where Chevron holds a 49% stake. This expansion makes Chevron the first major US corporate entity to act on an agreement recently cleared by Venezuela's National Assembly. Chevron has uniquely maintained its presence in Venezuela since the industry's nationalization in 2007, a period that saw other major players like Exxon and ConocoPhillips exit the country.
This announcement coincides with a separate, broader agreement that grants the US control over one-fifth of Venezuela's oil reserves through North American Blue Energy Partners (NABEP). This deal involves a new company in which the US Department of War's Office of Strategic Capital will take a 35% stake, and the US State Department will have the right to purchase 20% of the output at production cost. Opposition lawmakers in Venezuela expressed concerns about the lack of transparency regarding the terms of this deal. US President Donald Trump has indicated that other US oil companies, including Exxon, would follow Chevron into Venezuela, though Exxon has stated its position remains unchanged and that Venezuela is currently "uninvestable."
Despite the large investments, analysts are skeptical about the speed at which Venezuela's oil output can be revived, estimating it could take between one to ten years for new barrels to reach the market. The US government is not directly investing capital but believes its backing will attract necessary private investment. The US Energy Secretary noted that increased investment would create jobs and prosperity for Venezuelans, and the Trump administration anticipates these moves will lead to downward pressure on oil prices.
