Chevron is set to invest more than $7 billion over the next five years in Venezuela and more than double production compared with 2026 levels
- CEO Mike Wirth cited better economics and stronger legal protections as two key reasons for the planned investment.
- Under the new agreements, Chevron expects total costs of less than $20 per barrel.
- Wirth added that Chevron has seen strong support from both the U.S. and Venezuelan governments.
Chevron (CVX) CEO Mike Wirth on Wednesday cited better economics and stronger legal protections as two key factors behind the decision to invest billions of dollars to expand its operations in Venezuela.
“As important as the commercial and fiscal terms were the legal terms, and the protections for investors,” Wirth said during an interview with Bloomberg TV on Wednesday.
Chevron on Wednesday announced updated agreements covering its Venezuelan joint ventures. The agreements would see the oil company invest more than $7 billion over the next five years and more than double production to roughly 600,000 barrels per day compared with 2026 levels.
At the time of writing, CVX shares edged 0.4% higher.
What Changed For Chevron?
“The first thing is, it’s more economic,” Wirth said, adding that earlier it was “very difficult to get a competitive return on investments” in Venezuela.
Under the new agreements, Chevron expects total costs of less than $20 per barrel and has received additional acreage in the 50,000-square-km Orinoco Belt.
“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,” Wirth said.
The second issue was protecting Chevron’s investment. In 2007, Exxon Mobil (XOM) and ConocoPhillips (COP) left the country after their projects were nationalized.
“There are very strong legal protections in Venezuela and beyond that are part of this deal that give us the confidence to make this investment,” he said.
Wirth added that Chevron had seen strong support from both the U.S. and Venezuelan governments.
Bid To Boost Oil Production In Venezuela
The deal comes amid a major reshaping of Venezuela’s oil industry after U.S. forces captured and removed former President Nicolás Maduro in January. U.S. President Donald Trump has since pushed for private investment in the country’s energy sector.
Earlier this week, Venezuela awarded a U.S.-backed oil producer 100-year rights to develop 17 oil fields holding about 65 billion barrels of proven reserves.
Despite having the world’s largest oil reserves, the country reportedly produces only about 1.25 million barrels per day (bpd), down from more than 3 million bpd two decades ago. Production is expected to recover to around 2 million barrels per day by 2030.
Meanwhile, retail sentiment surrounding CVX remained ‘extremely bullish’ over the past 24 hours.
CVX shares have gained more than 36% so far this year, outperforming rival Exxon’s (XOM) 33% rise. The broader United States Oil Fund LP (USO) has surged more than 100%.
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