- Chevron plans to double the number of drilling rigs it operates in Venezuela under a five-year expansion that targets roughly 600,000 barrels per day of production.
- CFO Eimear Bonner said Tuesday that Chevron will add rigs under new contract terms signed with Venezuela last week.
- Those terms also give Chevron access to international arbitration, a particularly useful provision in a country with a long history of oil nationalizations and contract disputes.
- Oil executives in Caracas expressed anxiety and apprehension about the political risks of the deal.
- Chevron has been in Venezuela since 1923 and stayed through the nationalizations that pushed ExxonMobil and ConocoPhillips out in 2007.
- Venezuela reopened its oil sector, and Chevron continued through joint ventures with PDVSA, giving it producing assets, staff and infrastructure already on the ground.
- Last week, the U.S. and Venezuela announced a larger oil agreement, granting North American Blue Energy Partners 100-year concessions on 17 fields with about 65 billion barrels of proven reserves.
Chevron's ambitious expansion in Venezuela comes as the company aims to double its drilling rigs, targeting a production increase to 600,000 barrels per day through a $7 billion investment. Despite this, oil executives remain wary of the political landscape shaped by the Trump administration.4
The company’s CFO, Eimear Bonner, confirmed that Chevron will add rigs under new contract terms signed with Venezuela, which also provide access to international arbitration—an essential safeguard in a country with a history of oil nationalizations and contract disputes. Current production stands at 290,000 bpd, all exported to the United States, with production costs expected to remain below $20 per barrel.
However, the excitement surrounding this expansion is tempered by concerns over the political implications of the Trump administration's deal. An industry insider noted that there is “a lot of apprehension” regarding how the U.S. government will influence operations, particularly with Venezuelan oil magnate Alejandro Betancourt López involved. Vincent Piazza, a senior energy analyst at Bloomberg Intelligence, emphasized that “the real risk is not technological, it’s not geological, it’s exclusively political.”
Chevron has maintained a presence in Venezuela since 1923, surviving nationalizations that forced other companies like ExxonMobil and ConocoPhillips out in 2007. The recent expansion aligns with a broader U.S.-Venezuela oil agreement that grants North American Blue Energy Partners 100-year concessions over fields with approximately 65 billion barrels of proven reserves.
“The expansion targets roughly 600,000 barrels per day, with current production at about 290,000 bpd all exported to the U.S. Executives' apprehension stems from uncertainty over the U.S. government's role and whether the deal will favor Venezuelan magnate Alejandro Betancourt López.”
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