Chevron said on Wednesday it had agreed with Venezuela on updated terms for its joint ventures in the country and plans to invest more than $7 billion over the next five years, targeting production of about 600,000 bpd.
The expansion is the culmination of several months of negotiation conducted separately from Washington’s recent announcement of an unprecedented deal to take majority control of about 65 billion barrels of Venezuela’s oil reserves.
The agreements provide enhanced fiscal, commercial and legal terms and include additional acreage in Venezuela’s Orinoco Belt, Chevron said.
Following the U.S. capture and removal of Venezuelan President Nicolas Maduro from office in January, U.S. President Donald Trump has pushed a $100 billion reconstruction plan for Venezuela’s energy sector, urging U.S. oil companies to invest in the country.
While Chevron’s Venezuela operations have continued uninterrupted for at least 100 years, fellow oil producers ExxonMobil and ConocoPhillips have remained on the sidelines.
Both companies exited the country in 2007 when their assets were nationalized under the previous government of President Hugo Chavez.
Chevron said the investment would support production growth at its three Venezuelan joint ventures, which have increased output by 15% so far this year. Total costs are expected to remain below $20 per barrel, the company said.
Chevron’s Petroindependencia joint venture, in which it holds a 49% stake, received rights to develop two new areas in Venezuela’s Orinoco Belt, expanding its operations in the region.
“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,” said Chevron CEO Mike Wirth.
Chevron has operated in Venezuela since 1923 and has three joint ventures in the country. Petroindependencia and Petropiar operate in the Orinoco Belt, while Petroboscan operates in western Zulia state.
The expanded acreage and improved terms give Chevron a larger position in Venezuela as the U.S. oil major seeks to increase production from the country’s vast extra-heavy crude resources.
Italy’s Eni, India’s ONGC, Colombia’s GeoPark and U.S. firm GE Vernova are also expected to sign agreements for energy projects in Venezuela this week.
(Reporting by Arunima Kumar and Vallari Srivastava in Bengaluru; Editing by Arun Koyyur)