Oil giant Chevron has confirmed plans to expand its operations in Venezuela, following an announcement by President Donald Trump regarding a deal to develop the nation's oil reserves.
Chevron, currently the sole U.S. oil company with a major footprint in Venezuela, stated it has been allocated additional territory in the Orinoco Belt, an area where it already conducts business. The company intends to invest over $7 billion in the next five years, aiming to more than double its current output to approximately 600,000 barrels per day.
"Chevron’s history in Venezuela spans more than a century, and our expanded position reflects our confidence in the country’s deep resource potential," Chevron CEO Mike Wirth said in a statement.
Venezuela possesses the world's largest proven oil reserves, estimated at over 303 billion barrels, according to OPEC data. However, severely degraded energy infrastructure and international sanctions have limited its daily production to just over one million barrels, significantly less than countries like Saudi Arabia. The United States currently produces nearly 14 million barrels per day.
The White House has confirmed a partnership with North American Blue Energy Partners as part of the administration's initiative to tap into Venezuela's oil sector. Energy Secretary Chris Wright stated that the effort aims to "increase confidence for private businesses to come do deals in Venezuela, directly with the government of Venezuela."
Despite these developments, energy experts have expressed skepticism, suggesting that reviving Venezuela's disarrayed oil industry will take years. Questions have also been raised regarding the authority of Venezuela's acting president, Delcy Rodríguez, to grant Chevron 100-year rights to 17 oil fields. The constitution of Venezuela requires approval from the National Assembly for such arrangements, which has not occurred, according to Ian Vásquez, vice president for international studies at the Cato Institute.
Vásquez described the deal as lacking legitimacy, given its agreement with a government he characterized as a dictatorship that has maintained power through suppression and electoral fraud. He also noted the deal was reached under significant pressure from the United States, which he believes will lead future Venezuelan democracies to question its validity.
President Trump has previously expressed interest in Venezuela's oil resources, stating in January that "We have Exxon going in, we have Chevron going in. We have our big oil companies going in." However, other major U.S. oil companies have indicated no change in their stance. Exxon Mobil CEO Darren Woods previously called Venezuela "uninvestable," and a company spokesperson recently stated that "nothing has changed."
Historically, U.S. oil majors have faced challenges in Venezuela. The nation nationalized its oil industry in 1976, creating the state-owned company Petróleos de Venezuela S.A. In 2007, under President Hugo Chávez, foreign oil companies were pushed into state-controlled joint ventures, with assets seized from those that refused. Chevron accepted a joint venture, while companies like Exxon and ConocoPhillips refused and had their assets taken.
Trump has suggested the agreement could lead to a substantial reduction in U.S. gasoline prices. However, analysts caution that Venezuela's dilapidated infrastructure will require significant investment and time, potentially two to four years, to bring new facilities online in the Orinoco region, and longer in areas lacking supporting infrastructure.
