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Chevron Outlines $7 Billion Investment Plan to Double Venezuela Oil Production in 5 Years

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Chevron Outlines $7 Billion Investment Plan to Double Venezuela Oil Production in 5 Years

Chevron (CVX) outlined a plan to invest more than $7 billion in Venezuela and double its oil production capacity in the South American country over the next five years.

The energy giant has entered into deals with Venezuela, setting up updated terms for its joint ventures in the country, including "enhanced" fiscal, commercial and legal terms, the company said Wednesday.

Under the agreements, Chevron's Petroindependencia joint venture has received the rights to develop the adjacent Carabobo-1 and Carabobo-2-South-A areas in the Orinoco Belt. The energy giant's subsidiary holds a 49% stake in the joint venture.

The move paves the way for an investment of over $7 billion over the next five years, more than doubling production to about 600,000 barrels per day, compared with 2026, according to Chevron.

"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," Chief Executive Mike Wirth said in a statement.

The development marks "a material reset of the growth upside framing" for Chevron, TPH Research said in a note to clients. "Key questions would be around the terms themselves and the cadence of (capital expenditure) and production growth."

Chevron shares were up 0.4% in Wednesday afternoon trade, bringing its year-to-date gains to nearly 39%.

In January, the US captured former Venezuelan President Nicolas Maduro in a military raid and seized control of the country's oil exports.

Venezuela's recent hydrocarbon law made the country highly competitive, prompting Chevron to commit significant investment capital, CNBC reported Wednesday, citing Wirth.

Last week, US President Donald Trump reportedly said Washington reached an agreement with Venezuela to get majority control of more than 65 billion barrels of oil reserves.

In July, Chevron reported year-over-year gains in second-quarter results as supply disruptions in the Middle East amid the US-Iran war boosted oil prices.

Price: $212.06, Change: $+1.01, Percent Change: +0.48%

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