By Sheila Dang and Marianna Parraga
HOUSTON, Sept 2 (Reuters) – Chevron will invest more than $7 billion through its Venezuela joint ventures to double oil production to about 600,000 barrels per day over the next five years in the South American country, the U.S. oil major said on Wednesday.
Under new agreements, Chevron’s Petroindependencia joint venture will expand to include two adjacent areas in the Carabobo region located in Venezuela’s vast Orinoco Belt.
“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,” Chevron CEO Mike Wirth said in a statement.
The announcement comes just days after U.S. President Donald Trump unveiled an unprecedented deal involving a fifth of Venezuela’s oil reserves, with the American government taking an equity stake in a private oil firm operating there. Chevron’s expansion is separate from that endeavour, but it further cements Trump’s efforts expand output in Venezuela.
Venezuela has the world’s largest oil reserves, but its current output is only about 1.25 million bpd, down from the more than 3 million bpd it achieved two decades ago, after years of mismanagement and underinvestment by state-run oil firm PDVSA.
Venezuela’s total oil output is expected to reach 2 million bpd by the end of this decade, U.S. Energy Secretary Chris Wright said on Wednesday.
Chevron said its agreements also provide enhanced fiscal, commercial and legal terms to protect the long-term investments.
U.S. PUSHES ENERGY INVESTMENT
Following the U.S. capture and removal of former Venezuelan President Nicolas Maduro from office in January, Trump 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 exited the country in 2007 when their assets were nationalized under the previous government of President Hugo Chavez.
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 additional Carabobo sites expand existing operations where joint ventures are increasing extra-heavy oil production, Chevron said.
(Reporting by Sheila Dang and Marianna Parraga in Houston and Arunima Kumar and Vallari Srivastava in Bengaluru; Editing by Arun Koyyur, Nathan Crooks, Philippa Fletcher)
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