Chevron Expands in Venezuela, to Invest Over $7 Billion

U.S. oil giant Chevron said on September 2 it will invest more than $7 billion through its ventures in Venezuela to double its crude output to about 600,000 barrels per day over the next five years.

Chevron, the only U.S. oil company with a significant presence in the South American nation, was granted additional drilling areas in the Orinoco Belt, where it already has a strong foothold. Its Petroindependencia joint venture will expand to include two neighboring areas in the Carabobo region.

“Chevron’s operating history in Venezuela spans more than a century, and this expansion of our position reflects our confidence in the country’s deep resource potential as well as the competitive ability to attract investment in our portfolio for decades to come,” Chief Executive Mike Wirth said in a statement.

The announcement comes days after U.S. President Donald Trump unveiled an unprecedented deal involving a fifth of Venezuela’s oil reserves, with the U.S. government taking a stake in a private oil company operating there. Chevron’s expansion is separate from that agreement but further supports Trump’s push to ramp up production in Venezuela.

Venezuela holds the world’s largest proven oil reserves, yet its current output of about 1.25 million barrels per day is down from more than 3 million barrels per day two decades ago, due to years of mismanagement, underinvestment by state oil firm PDVSA, and U.S. sanctions.

U.S. Energy Secretary Chris Wright said on September 2 that Venezuela’s total oil production is expected to reach 2 million barrels per day by the end of this decade.

Chevron said the new agreements also provide improved financial, commercial, and legal terms to protect long-term investments, and added that its expected total production costs are below $20 per barrel.

“Our infrastructure is in good shape, and development in the new areas will leverage existing facilities and pipelines,” Wirth told CNBC.

“Our ability to grow at low cost is different than if we went to a completely new area without roads, water, or electricity,” he said.

Beyond Chevron, Italy’s ENI, investment firm KEO Capital, and energy company Primavera—co-founded by billionaire Fred Ehrsam to invest in Venezuela—are among companies expected to sign energy agreements in Venezuela on September 2, according to two sources familiar with preparations.

Most of the deals involve expanding projects already negotiated under a broader transition of dozens of energy contracts to new terms following a comprehensive oil reform passed in January.

Wright, who arrived in Caracas on the evening of September 1, and Venezuela’s Oil Minister Paula Henao are expected to oversee the signing of the contracts, officials said.

U.S. Pushes Energy Investment

After former Venezuelan President Nicolas Maduro was ousted from power in January, Trump has promoted a $100 billion reconstruction plan for Venezuela’s energy sector, urging U.S. oil companies to invest in the country.

While Chevron has operated in Venezuela continuously for at least 100 years, other oil producers such as ExxonMobil and ConocoPhillips left the country in 2007 when their assets were nationalized under former President Hugo Chavez’s government, and they have not returned.

Chevron has operated in Venezuela since 1923 and holds three joint ventures there. Petroindependencia and Petropiar operate in the Orinoco Belt, while Petroboscan operates in the western state of Zulia.

The additional Carabobo areas expand existing operations, where the ventures are boosting production of extra-heavy crude, Chevron said.