Chevron announced plans Wednesday to more than double its oil production in Venezuela over the next five years through a $7 billion investment that expands its position in the South American nation.
The oil major has been assigned two additional oilfields in the Orinoco Belt, the region that contains most of Venezuela’s vast extra heavy crude reserves. Chevron plans to increase its production in the country to 600,000 barrels per day compared with around 280,000 bpd currently.
Chevron is the only U.S. oil major active in Venezuela through joint ventures with state-owned oil company PDVSA.
“With improved terms and additional acreage, we are strengthening a portfolio that we believe can deliver attractive low-cost oil growth, support energy supply and create differentiated long-term value,” Chevron CEO Mike Wirth said in a statement.
Chevron’s announcement comes as the U.S. government pushes to increase oil production in Venezuela through private investment. The country’s oil infrastructure is in a state of disrepair after years of mismanagement by its socalist government.
President Donald Trump announced Friday that the U.S. secured majority control over 65 billion barrels of Venezuela’s crude oil reserves, about 20% of the 303 billion barrels the country is thought to possess. U.S. Energy Secretary Chris Wright is visiting Venezuela Wednesday.
Washington has partnered with the private oil company North American Blue Energy Partners to develop those reserves. Venezuela’s interim government has given NABEP concessions to 17 oilfields for 100 years. NABEP, in turn, has granted the U.S. Defense Department a 35% equity stake.
The U.S. captured former President Nicolás Maduro in a military raid in January and seized control of Venezuela’s oil exports. Washington has partnered with interim President Delcy Rodríguez, who served as vice president under Maduro.
Chevron shares were up less than 1% in premarket trading after the announcement.
