Chevron said Wednesday it has reached updated terms with Venezuela for its joint ventures in the country, committing more than $7 billion over the next five years. The company’s stock was up 0.42% on the day.
The target is to lift Venezuelan oil production to around 600,000 barrels per day, roughly double current levels. Total production costs are expected to come in below $20 per barrel.
The new agreements expand Chevron’s Petroindependencia joint venture to include two adjacent areas in the Carabobo region of Venezuela’s Orinoco Belt. Chevron already operates three joint ventures in the country: Petroindependencia and Petropiar in the Orinoco Belt, and Petroboscan in the western state of Zulia.
Chevron CEO Mike Wirth said the expansion reflects confidence in Venezuela’s resource potential. “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,” Wirth said.
The company has operated in Venezuela since 1923, making it one of the few U.S. oil majors with a continuous presence there. ExxonMobil and ConocoPhillips both exited in 2007 after their assets were nationalized under Hugo Chavez and have not returned.
The announcement comes days after President Trump unveiled a deal giving the U.S. majority control over roughly 65 billion barrels of Venezuelan oil reserves. Chevron’s expansion is separate from that deal but fits into the broader push to revive Venezuela’s oil sector.
Venezuela holds the world’s largest oil reserves but currently produces only about 1.25 million barrels per day. That is down from more than 3 million barrels per day two decades ago, following years of mismanagement by state-run PDVSA.
U.S. Energy Secretary Chris Wright, who arrived in Caracas late Tuesday, expects Venezuela’s total oil output to reach 2 million barrels per day by the end of the decade. Wright and Venezuela’s oil minister Paula Henao are expected to oversee the signing of multiple energy contracts.
Wirth said the infrastructure supporting the expansion is already in place. “Our ability to grow at low cost is quite different than if we were going into a greenfield area that didn’t have roads, that didn’t have water, that didn’t have power,” he told CNBC.
Chevron is not the only company signing agreements. Oil producer ENI, investor KEO Capital and energy firm Primavera, co-founded by billionaire Fred Ehrsam, are among those expected to sign energy agreements in Venezuela as soon as Wednesday.
Most of those pacts involve project expansions negotiated as part of a sweeping oil reform approved in January, following the removal of former President Nicolas Maduro from office.
Chevron said the new agreements include enhanced fiscal, commercial and legal terms to protect long-term investments. Across its three Venezuelan joint ventures, the company has already raised output by 15% this year.
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