Chevron to invest over $7bn in Venezuela, targets twofold rise in oil output

Houston: Chevron Corporation will invest more than $7 billion in its Venezuelan joint ventures over the next five years and more than double production to around 600,000 barrels per day, after securing updated terms and additional acreage from Venezuela to support future investment and production growth, as per an official statement by the company.

The agreements provide Chevron's joint ventures with enhanced fiscal, commercial and legal terms aimed at supporting long-term investment and project development, the US energy major said on Wednesday.

The development comes as US Energy Secretary Chris Wright is set to travel to Venezuela for an expected announcement on Chevron's plans to expand its operations.

Wright's visit comes after a recent oil agreement between the US and Venezuela, under which Washington finalised terms for a direct ownership stake in Venezuelan oil fields previously influenced by Chinese and Russian corporations, according to a US official.

The official had said the arrangement was aimed at securing long-term US energy supplies and bringing Venezuela's oil resources further into the Western Hemisphere's economic orbit.

Against this backdrop, Chevron said its expanded position in Venezuela would strengthen its portfolio and support future oil growth.

"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 Chairman and CEO Mike Wirth said.

Under the latest agreements, Petroindependencia, in which Chevron's subsidiary holds a 49 per cent interest, has received rights to develop the adjacent Carabobo-1 and Carabobo-2-South-A areas in Venezuela's Orinoco Belt.

The new acreage expands the joint venture's existing operational footprint, where it is increasing extra-heavy oil production.

The move builds on an April agreement under which Chevron increased its working interest in Petroindependencia to 49 per cent and received rights to develop the adjacent Ayacucho 8 area linked to its Petropiar joint venture.

Chevron said its three joint ventures in Venezuela have collectively increased production by 15 per cent year-to-date.

The company expects the latest agreements to support more than $7 billion of investment over the next five years, with production targeted at approximately 600,000 barrels per day, more than double its 2026 level, according to the statement.

"We appreciate the leadership of the Administration, particularly the US Department of Energy, and Secretary Wright's partnership in helping facilitate the conditions for further investment and growth," Wirth said.

Chevron said total costs in Venezuela are below $20 per barrel and credited the US administration, particularly the Department of Energy, for helping facilitate conditions for further investment and growth.