Chevron will invest more than $7 billion in Venezuela over the next five years and more than double its oil production in the country to about 600,000 barrels per day, Reuters reported Wednesday.
The investment follows new agreements with Venezuela that give Chevron improved fiscal, commercial and legal terms and additional acreage in the Orinoco Belt. Chevron said its three Venezuelan joint ventures will invest the money through 2031, with total production costs remaining below $20 per barrel.
Chevron currently produces about 290,000 bpd in Venezuela, all of which is exported to the United States, according to Reuters. Venezuela is producing about 1.1 million to 1.2 million bpd, down from more than 3 million bpd in the late 1990s.
The new acreage includes the Carabobo-1 and Carabobo-2-South-A areas in the Orinoco Belt, assigned to Petroindependencia, the joint venture in which Chevron holds a 49% interest. Chevron also increased its Petroindependencia stake to 49% in April and received rights to develop the Ayacucho 8 area next to its Petropiar venture. Its three Venezuelan joint ventures have increased production by 15% so far this year.
Wednesday’s announcement puts a dollar figure and production target on the Chevron agreements that were nearing completion earlier this week. Those agreements were previously described only as being of “significant size,” with Chevron seeking additional Orinoco Belt acreage.
Chevron’s investment is separate from Washington’s agreement to take a majority stake in 17 Venezuelan oilfields containing about 65 billion barrels of proved reserves. President Donald Trump has also called for roughly $100 billion of investment to rebuild Venezuela’s oil industry following the U.S. capture and removal of Nicolás Maduro in January.
ExxonMobil and ConocoPhillips have yet to return after their Venezuelan assets were nationalized under Hugo Chávez in 2007.
By Michael Kern for Oilprice.com
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